MILK PRODUCERS CO-OPERATIVE SOCIETIES IN …...submitted by Miss PRIYADARSHINI C. GADAD for the degree of MASTER OF SCIENCE (AGRICULTURE) in AGRICULTURAL ECONOMICS to the University

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MILK PRODUCERS CO-OPERATIVE SOCIETIES IN BETTERMENT OF DAIRY FARMERS

ECONOMY - AN ANALYSIS

PRIYADARSHINI C. GADAD

DEPARTMENT OF AGRICULTURAL ECONOMICS COLLEGE OF AGRICULTURE, DHARWAD

UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD-580 005

JUNE, 2015

ii

MILK PRODUCERS CO-OPERATIVE SOCIETIES IN BETTERMENT OF DAIRY FARMERS

ECONOMY - AN ANALYSIS

Thesis submitted to the University of Agricultural Sciences, Dharwad

in partial fulfillment of the requirements for the Degree of

MASTER OF SCIENCE (AGRICULTURE)

in

AGRICULTURAL ECONOMICS

By

PRIYADARSHINI C. GADAD

DEPARTMENT OF AGRICULTURAL ECONOMICS COLLEGE OF AGRICULTURE, DHARWAD

UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD-580 005

JUNE, 2015

iii

DEPARTMENT OF AGRICULTURAL ECONOMICS COLLEGE OF AGRICULTURE, DHARWAD

UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD

CERTIFICATE

This is to certify that the thesis entitled “MILK PRODUCERS CO-OPERATIVE

SOCIETIES IN BETTERMENT OF DAIRY FARMERS ECONOMY - AN ANALYSIS”

submitted by Miss PRIYADARSHINI C. GADAD for the degree of MASTER OF

SCIENCE (AGRICULTURE) in AGRICULTURAL ECONOMICS to the University of

Agricultural Sciences, Dharwad is a record of research work carried out by her

during the period of her study in this university, under my guidance and supervision,

and the thesis has not previously formed the basis for the award of any degree,

diploma, associateship, fellowship or other similar titles.

DHARWAD (L. B. KUNNAL) JUNE, 2015 CHAIRMAN

Approved by : Chairman : ____________________________

(L. B. KUNNAL)

Members : 1. __________________________ (H. BASAVARAJA)

2. __________________________ (S. L. PATIL)

3. __________________________ (A. D. NAIK)

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ACKNOWLEDGEMENT

Gratitude takes three forms, “A feeling from the heart, an expression in words

and a giving in return…..”

At last, the moment has come to look into the deeper layers of my heart which

is filled with the feeling of togetherness and loveliness; consolation and satisfaction.

Some are permanent and some are momentary but both involve a number of

persons to whom I acknowledge my warm regards.

First and foremost I humbly bow my head before the Almighty for the un-

merited blessings through various hands. I submit this small venture before God with

full satisfaction and pleasure from my heart.

I wish to express my deep sense of reverence to, Dr. L. B. KUNNAL,

Professor, Department of Agricultural Economics, University of Agricultural

Sciences, Dharwad and the esteemed chairman of my advisory committee. I am

profoundly thankful to him for his constant encouragement, keen interest,

constructive criticism and everlasting patience throughout the endeavor and

devoting his time amidst his busy schedule.

It is with great respect and devotion I place on record, my deep sense of

gratitude and indebtedness to my advisory committee members

Dr. H. BASAVARAJA, Professor, Department of Agricultural Economics,

Dr. S. L. PATIL, Professor, Department of Agricultural Extension Education and

Dr. A. D. NAIK, Associate Professor, Department of Agribusiness Management for

their sustained and valuable guidance, constructive suggestions, unfailing patience,

friendly approach, constant support and encouragement throughout the period of my

research work.

I am extremely delighted to place on record my profound sense of gratitude to

Dr. B. L. Patil, Professor and Head, Department of Agricultural Economics, Dr. S. B.

Hosamani, Vice-chancellor, Rani Chennamma University, Belagavi Dr. S. M.

Mundinamani, Dr. G. N. Kulkarni, Dr. Mamale Desai, Dr. R. S. Poddar, Dr. M. T.

Sharma, Dr. J. A. Handigol, and Dr. R. L. Biligi for their unstinted support, critical

comments and valuable suggestions during the study and research work. Also

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extent my sincere thanks to all the staff members, students and messengers

Balamma and Gouramma of Agricultural Economics Department for their help

rendered to me during the course of my study.

With much love and affection, I record my respectful indebtedness and

gratitude to my parents Shri Chandrashekhar, Smt. Parvati, brothers Uday, Ravi,

sisters, relatives and friends whose love and affection have always been a source of

inspiration and encouragement to me in all walks of my life.

As said “dearest is the friends love” who’s volunteered help at time of need for

achieving my cherished goal and pave me to offer my loveable and indebted thanks

to my most beloved friends Anusha, Ashwini, Gonibasappa, Laxmi, Maheshwari,

Mohan, Priya, Praveen, Radhika, Shilpa, Suma, Sneha G.L., Sneha, Savita,

Siddappa, Sani Datta, Santosh, Sangmesh, Shivkumar, Usharani, Vaibhav,

Veeresh, Vinuta, Vijay, seniors, juniors and who have been with me in my endeavor,

for their constant help during work helped me to pursue my research work with

precision.

I convey my whole hearted thanks to M/s Anup Computers, Dharwad for his

meticulous typing of the manuscript neatly and timely.

………….omission of any names doesn’t the lack of gratitude.

DHARWAD JUNE, 2015 (Priyadarshini C. Gadad)

vi

C O N T E N T S

Sl. No.

Chapter Particulars

CERTIFICATE

ACKNOWLEDGEMENT

LIST OF TABLES

LIST OF FIGURES

LIST OF APPENDICES

1. INTRODUCTION

2. REVIEW OF LITERATURE

2.1 Pattern of inputs procurement by the dairy farmers from milk producers co-operative societies

2.2 Pattern of milk marketing by the members to the milk producers co-operative societies

2.3 Costs and returns in milk production

2.4 Problems faced by the dairy farmers in production and marketing of milk

3. METHODOLOGY

3.1. Description of the study area

3.2. Sampling procedure

3.3. Nature and source of data

3.4. Analytical techniques employed

3.5. Definition of terms and concepts used

4. RESULTS

4.1 Socio-economic characteristics of the dairy farmers.

4.2 Composition of the dairy animals of sample farmers.

4.3 Pattern of input services procurement by the dairy farmers from MPCS and other agencies

4.4 Pattern of milk marketing of the dairy farmers.

4.5 Cost and returns structure in milk production.

4.6 Resource use efficiency in milk production.

4.7 Problems faced by the members of milk producers co-operative societies in production and marketing of milk

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Contd…..

Sl. No.

Chapter Particulars

5. DISCUSSION

5.1 Socio-economic characteristics of the dairy farmers

5.2 Composition of the dairy animals of sample farmers

5.3 Pattern of input services procurement by the dairy farmers from MPCS and other agencies

5.4 Pattern of milk marketing of the dairy farmers

5.5 Cost and returns structure in the milk production

5.6 Resource use efficiency in milk production

5.7 Problems faced by the members of milk producers co-operative societies in production and marketing of milk

6. SUMMARY AND POLICY IMPLICATIONS

REFERENCES

APPENDICES

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LIST OF TABLES

Table No.

Title

3.1 Salient features of Dharwad district

3.2 Dairy Cooperatives in Karnataka

4.1 Socio-economic characteristics of sample dairy farmers

4.2 Composition of dairy animals of sample dairy farmers

4.3 Farm asset possession of the sample dairy farmers

4.4 Pattern of input services procurement by the dairy farmers from MPCS

4.5 Pattern of input services procurement by the dairy farmers from Other Agencies

4.6 Opinion of sample farmers regarding services extended by MPCS in the study area

4.7 The pattern of milk marketing by the dairy farmers

4.8 Pattern of sale of milk products

4.9 Cost involved in milk production (per animal/annum)

4.10 Returns from milk production (per animal/annum)

4.11 Cobb-Douglas Production Function estimates

4.12 Allocative efficiency of resources in milk production

4.13 Problems faced by the dairy farmers in milk production

4.14 Problems faced by the dairy farmers in marketing of milk

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LIST OF FIGURES

Figure No.

Title

1. Map showing the study region

2. Sampling Frame

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LIST OF APPENDICES

Appendix No.

Title

I Schedule

II Livestock and poultry population (District wise)

1. INTRODUCTION

Agriculture throughout the world is still man’s single most important

activity despite, all the advances of high technology; it is still the only reliable

source of food. Agriculture is the largest single employer in many third world

countries. India with 2.4 per cent of the global geographical area, 16 per cent of

the world human population and nearly 17 per cent of cattle population, still

more than 65 per cent of population is dependent on agriculture in one or the

other way. It is the main or only source of livelihood for over 50 per cent of

population, and contributes 13.9 per cent to the national income.

Livestock is an integral part of farming and contributes substantially to

household nutritional security and poverty alleviation through increased

household income. It plays an important role in the rural economy. Livestock

rearing is an important source of income and employment in the rural areas.

Besides assisting crop production through provision of draft power, also helps in

improving soil fertility. For many years to come, the bullock and buffalo will

continue to be the main stay of agricultural operations particularly for small and

marginal farmers. Even in future, despite modernization, a large proportion of

motive power for rural transportation will be bullock based. Livestock also

provide increased economic stability to the farm or household, acting as a cash

buffer (small livestock) and as capital reserve (large animals), as well as a

deterrent against inflation. In mixed-farming systems, livestock reduce the risks

associated with crop production. They also represent liquid assets that can be

realized at any time, adding further stability to the production system.

Livestock and livelihood are very intimately related in our country and

crop livestock integrated farming is the pathway of farmers’ well-being. Crop

residue forms the major source of feed to the livestock and livestock sector

support the crop sector in the form of draught power and organic manure;

supplies hides, skin, bones, blood and fibers to the industrial sector; and

provides transportation. Livestock sector also plays an important and vital role in

providing nutritive food rich in animal protein, in supplementing family income

and generating gainful employment in the rural sector, particularly among the

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landless, small, marginal farmers and women, and thus is a dependable “bank

on hooves” in times of need.

With the galloping growth in human population, the demand for crop and

livestock production is ever increasing. Currently, livestock is one of the fastest

growing agricultural sub-sectors in developing countries and this sector provides

regular employment to 11 million people in principal status and 9 million people

in subsidiary status. Its share to total GDP is around 3.90 per cent and is largest

segment of the agricultural sector. This growth is driven by rapidly increasing

demand for livestock products, driven by population growth, urbanization and

increasing incomes. The Net Domestic Product from agriculture and allied

activities is 1179341 crores out of which livestock sector contributes 4,

59,051 crores of value of output (Basic Animal Husbandry Statistics, 2013,

Department of Animal Husbandry, Dairying and Fisheries, GOI). In livestock

sector, dairy has emerged as an important sub sector as it contributes 305484

crores of value of output to livestock sector (2011-12).It is also considered as

one of the potential sector for export earnings. This suggests its potential to

emerge as an engine of agricultural growth in the coming decades.

As per the figure of 19th livestock census, October 15, 2012 India has

blessed with huge livestock population of 512.05 million numbers, (Female

cattle -122.90 million numbers and Female buffaloes- 108.70 million numbers)

and livestock population constitutes 37.28 per cent cattle, 21.23 per cent

buffaloes, 12.71 per cent sheep, 26.40 per cent goats, 2.01 per cent pigs and

others 0.37 per cent. Livestock population has increased substantially in Gujarat

(15.36%), Uttar Pradesh (14.01%), Assam (10.77%), and Punjab (9.57%) Bihar

(8.56%), Sikkim (7.96%), Meghalaya (7.41%), Chhattisgarh (4.34%) and

Karnataka (3.19%).

Dairy farming is one of the important activities of the rural population of

our country. The importance of the dairy, as a subsidiary industry to agriculture,

has stressed by the National Commission on Agriculture. Dairy enterprise, next

to agriculture, not only provides continuous income and provides employment to

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a large number of the rural poor. Dairying can be used as a tool for poverty

alleviation in the country.

Milk being an important source of protein in India, particularly in rural

areas, the demand for milk is likely to increase with the increase in rural

prosperity. With the growing demand for various products, Dairy farming can

provide good opportunity, particularly for the small and marginal farmers and the

landless to improve their economy. Livestock development is a labour intensive

activity which demands very close attention throughout the year. This will be a

boon for the small farmers and landless who are mostly unemployed or under-

employed. Thus, animal husbandry can be promoted as a major economic

activity in non-irrigated regions in the country.

Milk co-operatives are an integral part of the milk marketing and dairy

development programme in India, popularly known as “operation flood”

launched by the government of India in collaboration with the world food

programme of the United Nations in July 1970. One of the world’s largest rural

development programmes ever undertaken, the operation flood aims at the

setting up of modern dairy industry to meet the India’s rapidly increasing need

for milk and its products and making it capable of viable and self-sustaining

growth. Operation flood helped dairy farmers to direct their own development,

placing control of the resources they create in their own hands. A national milk

grid links milk producers throughout India with consumers in over 700 towns and

cities, reducing seasonal and regional price variations while ensuring that the

producer gets fair market prices in a transparent manner on a regular basis. The

bedrock of operation flood has been village milk producer’s co-operatives, which

procure milk and provide inputs and services, making modern management and

technology available to members. Operation flood objectives included: (a)

Increase milk production (“a flood of milk”) (b) Augment rural incomes (c)

Reasonable prices for consumers.

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Operation flood was implemented in three phases

Phase-I (1970-78) was financed by the sale of skimmed milk powder and

butter oil gifted by the European Union then EEC through the world food

programme. NDDB planned the programme and negotiated the details of EEC

assistance during its first phase. Operation flood linked 18 of India’s premier

milk sheds with consumers in India’s four major metropolitan cities: Delhi,

Mumbai, Kolkata and Chennai.

Phase II (1981-85) increased the milk sheds from 18 to 139. Totally 290

urban markets expanded the outlets for milk. By the end of 1985, a self-

sustaining system of 43000 village co-operatives covering 4.25 million milk

producers had become a reality. Domestic milk powder production increased

from 22000 tons in the pre-project year to 140000 tons by 1989, all the increase

come from dairies set up under operation flood. In this way EEC gifts and World

Bank loan helped to promote self-reliance. Direct marketing of milk by producer

co-operatives was increased by several million litres a day.

Phase III (1985-1996) enabled dairy co-operatives to expand and

strengthen the infrastructure required to procure and market the increasing

volumes of milk. Veterinary first aid health care services, feed and artificial

insemination services for co-operative members were extended, along with

intensified member education. Operation flood Phase III consolidated India’s

dairy co-operative movement, adding 30000 new dairy co-operatives to the

42000 existing societies organized during Phase II. Milk sheds peaked to 173 in

1988-89 with the numbers of women members and women dairy co-operative

societies increasing significantly. Phase III gave increased emphasis to research

and development in animal health and animal nutrition. Innovations like vaccine

for theileriosis, bypass protein feed and urea-molasses mineral blocks, all

contributed to the enhanced productivity of milch animals. From the outset,

operation flood was conceived and implemented as more than a dairy

programme. “Operation flood can be viewed as a twenty year experiment

confirming the rural development vision” (World Bank report 1997).

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The co-operative structure

AMUL or Anand type of co-operative is a three-tier structure namely, (i)

the Village Milk Producer’s Co-operative Society (ii) The District Milk Producer

Co-operatives Union and (iii) The State Milk Marketing Federation.

Primary Co-operative Society consists of members with in the village

jurisdiction who own cattle and supply milk to the co-operatives on a regular

basis. Milk is collected twice daily; the sample of each producer is tested

individually for fixing prices. The payment for milk supplied is also made daily to

enable them to buy inputs like feed. An elected management committee of nine

members manages the primary co-operative society for a term of three years, of

which one will be the chairman. The management committee appoints a

secretary, a treasurer and other staff. The staff are trained in first aid and

artificial insemination to meet the local emergency needs.

The District Milk Producers Co-operative Union represents all the primary

milk producers’ co-operative societies, which are members of the union and is

managed by an elected management committee of 19 directors, which elects its

own chairman. The union has a large professional staff lead by the managing

director. The union is responsible for procurement, processing and marketing of

milk and providing technical and input services like veterinary services, supply of

feed, fodder, seeds and equipment besides training the staff.

In the co-operative structure, the marketing federation forms the third tier

for centralized marketing and purchase of milk. Its purpose is to maximize the

returns to the primary producers in their unions through centralized marketing,

purchase and quality control.

6

History of dairy co-operatives in Karnataka

In 1964, when late Prime Minister Lal Bahadur Shastri spent a night at

Ajarpur, during his visit to Gujarat, was impressed with working of the village

milk co-operative society. He requested Mr. Verghese Kurien, the general

manager of AMUL, to extend Anand type of dairy co-operatives to other parts of

the country. He also wrote to the chief ministers of different states to take the

initiatives to set up Anand type milk co-operative societies. This led to the

establishment of National Dairy Development Board (NDDB) in 1965 and its

sister organization called Indian Dairy Cooperation in 1970 to implement a well-

known programme known as Operation Flood which essentially entails the

setting up of Anand type of dairy co-operatives throughout the country. In 1973,

the Government of Karnataka prepared a dairy development project and

submitted it to the World Bank for funding. The total project cost of Rs 509.9

million was to be met by the Government of Karnataka and the World Bank. The

project report stipulated that the project should adopt Anand type dairy co-

operative societies and NDDB should act as consultant to the project. The

actual fieldwork was taken up in 1975. The project under Operation Flood-I

organized the Karnataka Dairy Development Corporation (KDDC) which

covered eight districts under four milk unions, namely Bangaluru (Bangaluru and

Kolar), Mysuru (Mysuru, Mandya and part of Kodagu), Hassan (Hassan,

Chikkmagaluru and part of Kodagu) and Tumkur (Tumkur and part of Mandya).

Later during 1983 under Operational Flood-II all the districts were covered.

Dharwad district co-operative milk producers federation limited, is

Karnataka’s one of the milk producing district organization. It is a district level

apex body of milk co-operatives, which aims to provide remunerative returns to

the farmers by eliminating the middlemen and also save the interest of

consumer by providing quality milk and milk products at competitive price. It

consists of 868 dairy co-operative societies, consisting of 127.85 thousand

members and the quantity of milk produced by Dharwad KMF in the year 2011-

12 was 40 thousand tonnes

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The White revolution of 70's had made spectacular land mark in the

India’s milk production scenario. India is the largest milk producer of the world

and milk has been marked as the number one farm commodity. Dairy farming is

making a significant contribution to the national economy and socio-economic

development in the country. In rural India where over 15-20 per cent families are

landless and about 80 per cent of the land holders belong to the category of

small and marginal farmers, livestock is the main source of livelihood. In the

absence of fertile land and assured irrigation which are controlled by a small

population of rich farmers and lack of employment in the industrial and service

sectors most of the rural families belonging to socio-economically weaker

sections of the society maintain different species of livestock to supplement their

income. Among various species of livestock, cattle and buffaloes are the major

contributors from this sector to the National GDP.

India, the largest producer of milk in the world, is set to produce over 133

million tonnes of milk during 2012-13. Several measures have been initiated by

the Government to increase the productivity of milch animals, which has

resulted in increasing the milk production significantly from the level of 102.60

million tonnes at the end of the Tenth Plan (2006-07) to 127.90 million tonnes at

the end of the Eleventh Plan (2011-12). The Annual growth rate for production

of milk is about 5 per cent in 2011-12 compared to 2010-11.Currently, the Indian

dairy market is growing at an annual rate of 7 per cent. Despite the increase in

production, a demand-supply gap has become imminent in the dairy industry

due to the changing consumption habits, dynamic demographic patterns, and

the rapid urbanization of rural India. This means that there is an urgent need for

the growth rate of the dairy sector to match the rapidly growing Indian economy.

Karnataka stands 11th in milk production producing 54 lakh tonnes of milk

in 2011-12. Hence dairying has become an important source of income for

millions of rural families and has assumed an important role in providing

employment and income generating opportunities. In Karnataka, the share of

animal husbandry in GSDP (Gross State Domestic Product) of agriculture and

allied activities during 2010-11 was 26 per cent. The state ranks eleventh in milk

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production and its share in livestock and poultry population in the country is 6.20

and 6.48 per cent, respectively.

Rationale/importance of the study

Due to continuous and intensive cultivation of land for meeting the

objective of food security, the natural resources have drastically degrading and

degraded over time. Many a times, this process is irreversible. Hence, such an

alarming loss/degradation of natural resources must be prevented in future at all

costs, otherwise the costs of recovery would be too high to imagine if left

unattended. So far, studies conducted on Milk Producers Co-operative Societies

in betterment of dairy farmer’s economy have been few and far between.

Analysis of Milk Producers Co-operative Societies in betterment of dairy farmer’s

economy is gaining lot of importance in recent years. Such a study would throw

light on the problems associated with Milk Producers Co-operative Societies in

betterment of dairy farmers’ economy and enable the academicians and policy

makers to formulate and implement appropriate policies for a balanced,

integrated agricultural development.

The present study is designed to study the Milk Producers Co-operative

Societies in betterment of dairy farmer’s economy in Dharwad district. It is

planned to understand the various components of the pattern of inputs

procurement by the dairy farmers from MPCS, the pattern of milk procurement

by MPCS, cost and return structure in milk production and problems faced by

the dairy farmers. In the process, the study would enlighten the potential

solutions. Hence present study was an attempt in this direction with following

specific objectives.

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Objectives

1. To study the pattern of inputs procurement by the dairy farmers from milk

producers co-operative societies.

2. To analyse the pattern of milk marketing by the members to the milk

producers co-operative societies.

3. To estimate the costs and returns in milk production.

4. To document the problems faced by the members of milk producers co-

operative societies in production and marketing of milk.

Hypotheses:

1. Dairy farmers get required inputs from milk producers co-operative

societies at right time in right quantity.

2. The milk procurement by the milk producers co-operative societies from

members is efficient.

3. The milk production in Dharwad district is profitable.

4. There are number of problems faced by the members of milk producer

co-operative societies in production and marketing of milk.

Limitation of the study

Since data were collected by survey method, the inherent lacunae

associated with this type of enquiry have crept into the study. Since, estimates

were provided by recalling the memory by respondents because of the non-

maintenance of the farm records, sincere efforts have been made to elicit the

accurate information by cross questioning. However, the degree of discrepancy,

if any, would be negligible as the estimates presented are on averages.

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Presentation of the study

The study has been presented under six chapters as indicated below

Chapter – I gives an introductory note highlighting the rationale of the study,

specific objectives and hypotheses of the study.

Chapter – II describes comprehensive review of the relevant research work

done in the past related to the present study.

Chapter – III outlines the features of the study area, sampling design followed,

and type of data, method of data collection, analytical tools employed and

definitions of the concepts used.

Chapter – IV contains the findings of the study presented under appropriately

titled tables and graphs.

Chapter – V discuses critically the results presented in the previous chapter.

Chapter – VI provides summary of the whole study and suggests the policy

implications based on the findings of the study.

At the end important references relating the present study have been

listed alphabetically. In the appendix the schedule used for the study is

presented.

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2. REVIEW OF LITERATURE

Research is a continuous process. For any scientific investigation

previous findings provide basis to the research. A brief review of literature is

an integral part of any investigation as it not only gives an idea on the work

done in the past, but also provides basis for interpretation and discussion of

the findings. It helps the researcher to develop a proper understanding of the

research problem and to develop a conceptual frame work to conduct the

study. The present study was designed to know the milk producers co-

operative societies in betterment of dairy farmers economy. So efforts are

made to review the available literature having direct or indirect bearing on

present study. For the sake of convenience, the available related reviews are

presented chronologically under the following headings.

2.1 Pattern of inputs procurement by the dairy farmers from milk producers

co-operative societies.

2.2 Pattern of milk marketing by the members to the milk producers co-

operative societies.

2.3 Costs and returns in milk production.

2.4 Problems faced by the dairy farmers in production and marketing of

milk.

2.1 Pattern of inputs procured by the dairy farmers from milk producers co-

operative societies

Baviskar (2001) in his article has brought out the results of his study on

two Co-operative societies in Sanjaya and Khada in Gujarat. He has quoted

the various benefits enjoyed by the Milk producers, such as guaranteed

market for milk at a fixed price, supply of cattle feed at a reasonable cost,

provision of regular and efficient veterinary and extension services in the

village itself. He has concluded that, while dairying adds to the profits of the

big farmer, it contributes to the survival and viability of the small ones.

12

Thomas et al. (2004) in their report they have brought out the results of

a study, which measured the various degrees of association that U.S. dairy

farmers had with agricultural co-operatives. It was reported that dairy farmers

tend to be affiliated with co-operatives in increasingly larger proportions as

their farm size increased while about 50 per cent of the dairy farmers

marketed milk through co-operatives. The same percentage purchased feed

from co-operatives. It was concluded that the dairy farmers tend to be loyal

members.

Sulaiman et al. (2006) conducted study on assessment of quality of

services of dairy cooperatives in Kerala with special reference to

Thiruvananthapuram district. A sample size consisting of 30 member farmers

of dairy cooperatives from different parts of the district were selected for the

survey. Purposive sampling method was adopted for the selection of sample

farmers. In order to collect data from the sample farmers a structured

interview schedule was used. Data regarding the various services provided by

the dairy societies to the farmers were collected. The data so collected were

coded, tabulated and analysed in terms of percentages and weighted score

ranking. It showed that in the case of feed out of 30 sample farmers surveyed

27 (90%) farmers were satisfied but in the case of veterinary services only six

farmers (20%) were satisfied, on the other hand in the case of other services

like supply of fodder, assistances in the form of technical and working capital

all the sample farmers opined that they are dissatisfied.

Deepak (2009) in his study addresses the issues relating to supply

chain management of the Indian dairy sector with focus on both cooperative

and private sector. the company`s activities in India have facilitated direct and

indirect employment and provides livelihood to about one million people

including farmers suppliers of packaging materials, services and other goods.

In the private sector reliance fresh has also been actively involved in supply

chain management of milk in India. In order to ensure sustained supply, it not

only extends low interest loan to farmers but also advices them on business

13

development, livestock insurance and other technical advisory services.

These private sector players involved in the supply chain management of milk

have capability to handle larger volumes, expand reach, balance costs and

addresses the demographic variations. They have also motivated dairy

producers and others involved in the supply chain to invest and increase their

earnings from dairy.

Prakash (2012) conducted study on the impact of innovative

technology in empowering milk producers in milk production and marketing in

Pithoria village of Ranchi. Thirty five milk producers were selected to

introduce innovative technology such as feeding management, animal health

management and productivity of animal, better prices of milk and milk

products and better market for their products. The data were collected at two

points of time, i.e., before introduction of innovative technologies and after

introduction of innovative technologies in January, 2011-12. The results

indicated that at the time of introduction of innovative technology out of thirty

five farmers, only two were habituated to use nutritional feed but after

introduction of innovative technology, i.e., nutritional management cent per

cent farmers adopted this technology on their farms. Similarly in case of

cattelshed management it was found that the farmers after interaction with the

scientists cent per cent farmers used kachha/ semi kachha shed for keeping

milch animal. On the whole, introduction of innovative technology by milk co-

operatives helped milk producers in improving the knowledge on how to make

dairy enterprise profitable on their farm through effective supply chain

management.

Koshta and Chandrakar (2012) had undertaken a study in Raipur

district of Madhya Pradesh to examine the milk sold by private dairy

entrepreneurs and cooperative sector. The study was based on primary data

collected from 30 members of MPCSs from three blocks of Raipur district and

70 non-members (private dairy entrepreneurs) selected from five villages in

the jurisdiction of each MPCS area, grouped under small, medium and large

14

according to the number of milch animals owned by them. Membres of

MPCSs possessed more cows, particularly crossbred Jersey cows than

buffaloes. Cows are more productive than buffaloes and crossbred Jersey

cow produce more milk as compared to other cow breeds. Operational cost

on concentrates formed more than 50 per cent of the total among members

and non-members of MPCSs. The study has suggested that non-members of

MPCSs should join the society to get assured market for their produce and to

avail of inputs like feed, fodder, seeds and medical facilities.

Rathod et al. (2014) conducted a study in western Maharashtra region

to know the perception of farmers towards livestock marketing services

delivered by dairy cooperatives with regard to timely availability, amount paid

and satisfaction level of the farmers towards the services. The study revealed

that 84.66 per cent of the farmers perceived that marketing services were

available in time. Most of the respondents (88 %) perceived that marketing

services were available free of cost to the farmers while 70.66 per cent

farmers were satisfied totally with marketing services. The farmers perceived

that they were benefited by marketing services of the dairy cooperative to a

great extent with regard to credit facilities, getting more income and access to

market facilities. The study concluded that Gokul Dairy Cooperative provided

various livestock marketing services for the farmers mostly on time at free or

nominal rates. There is an urgent need to improve upon the quality of

marketing services so that farmers would be more content and satisfied with

the services of dairy cooperatives.

2.2 Pattern of milk marketing by the members to the milk producers

cooperative societies

Chahal (1996) in his article has examined the data collected from

members of milk producers’ societies, milk sellers who disposed of milk to

centres attached to private milk plants and milk sellers who sold milk to the

milk vendors, sweet shops and local customers. He has concluded that the

milk co-operatives are playing a positive role in the rural milk market by

providing tough competition to the private traders.

15

Ntengua and Steve (1996) studied the Dairy products demand

and marketing in Kilimanjaro region, Tanzania. Study was carried out in

Kilimanjaro Region, northern Tanzania to investigate the regional demand for

dairy produce and the marketing system. Demand proved to be buoyant, with

an average LME consumption of 142 kg/person/year and an income elasticity

of demand of 0.90 in the urban areas, and 45 kg/person/year with income

elasticity of demand 1.10 for the rural areas. The main products considered

were fresh and sour milk. More than half the milk was consumed in the rural

areas. Demand was forecast to grow from 1990 to 2000 at 5 per cent per

year. The marketing system consisted of competing multiple channels

involving a parastatal, cooperatives and private traders. There was ample

evidence that the system was efficient, with producers obtaining as much as

78 per cent of the final milk price. The main policy concern was the adequate

upkeep of rural feeder roads during the rains. Public intervention in marketing

was not necessary for successful development of a regional dairy industry in

this case.

Mallick (1998) in his study attempted to examine the pattern of milk

disposal and marketing costs and margins in milk marketing in Cuttack district

of Orissa. The data were collected from a sample of 100 farmers, grouped

under two locations (urban and rural) and the data was pertaining to the year

1996-97.The marketing costs and margins in milk marketing were analysed.

The Orissa Milk Producers’ Federation LTD. (OMFED) collected 58.54 per

cent of milk produced in rural areas of Cuttack district. It pasteurized, packed

and distributed chilled milk in Cuttack and Bhubaneswar cities for final

consumption. But the urban dairy farms sold about 55 per cent of milk at their

door steps. The producer’s share in the consumer’s rupee varied from 65 per

cent to 97.50 per cent for the milk produced in rural dairy farms and from 69

per cent to 98 per cent in urban dairy farms.

16

Ingrid and Guido (1999) analysed the transaction cost of a small

innovative marketing channel for Beef in Belgium. This study tried to show the

benefits of the use of the transaction cost theory by setting out the theoretical

framework and applying it to one case study: a labelled beef cooperative and

its marketing channel in the south of Belgium that is representative for other

similar initiatives. The profitability of the innovative chains can be analysed

with the help of the described theoretical model which takes into account

possible trade-offs between revenues, production costs and transaction costs.

The case study shows that the inclusion of transaction costs is necessary to

evaluate the net benefits for the actors involved and thus to understand their

motives. The transaction cost theory also offers a good framework to analyse

the organisational form of the innovative marketing channel and to understand

why a certain form of organisation can be more efficient than relying on pure

market transactions.

Patil et al. (1999) based on their study of 40 sample households

conducted in April-May 1998 in a drought prone village of Sulikeri in Bagalkot

district of Karnataka, concluded that as for as production of milk is concerned,

the medium and large farm households produced more milk, on an average,

than small and marginal farm households. However, the milk sold as a

proportion of total production is very high in general, and still higher (80%) in

respect of marginal farm households. Although the milk is marketed through

three channels, viz., local sales by the households, sales to the milk vendors

and to the milk producers’ co-operative society. Milk vendors and MPCS

accounted for a major proportion of milk collected. Out of the total sales of

165 litres per day, two-third is sold to MPCS. However, among small farmer

households, milk sold to milk vendor is higher than that sold to MPCS due to

the reason that many small farmers took hand loans from the vendors with an

agreement to sell the milk to the vendor and secondly, due to the personal

relationship existing between the vendor and the households. However, by

and large, the sale to MPCS is higher.

Beohar (2000) attempted to study the economics and marketing of milk

production, based on data collected from 60 milk producing farmers selected

17

randomly from three villages of Sihora tehsil in Jabalpur district of Madhya

Pradesh. The data pertained to the year 1998-99.Two main channels were

identified in the study area, viz., (1) milk producer-consumer and (2) milk

producer-village trader/halwai-consumer. The study revealed that the large

size farmers obtained higher price for milk production than the medium and

small size-groups. It is also revealed that on an average 59 per cent of the

total quantity of milk produced was sold and the remaining was consumed

either directly or by conversion into ghee, curd, butter, and lassi, etc. In the

study area, the milk producers by selling milk directly to the consumers in the

village itself received 95 per cent of the price paid by the consumer while in

the second the milk producers mostly belonging to the large size-group

received 85.70 per cent of the price paid by the consumer.

Kumar and Mahalati (2000) analysed the price-spread, marketing costs

and Margin in Eggs in different marketing channels in South-west M.P. of

India. A study in price spread, cost and margin of the egg in different

marketing channels was carried out on 50 respondents in south-west M.P. It

showed that producer's share of consumer's rupee in egg marketing was

highest under producer-consumer direct channel than other channel where in

one or more middlemen existed.

Rangasamy and Dhaka (2002) conducted a study on economics of

milk procurement in a cooperative sector dairy plant in Tamil Nadu. A

comparative study to compare the distribution cost of cooperative and private

dairy plants was carried out. One milk plant from cooperative sector and one

milk plant from private sector were selected purposively in Coimbatore dist. of

Tamil Nadu. In order to work out the distribution cost major dairy products like

toned milk, standardized milk, full cream milk ,flavored milk ,butter and ghee

were taken for this study from both the plants . The data on distribution cost

were collected from selected dairy plants for the financial year 2001-02. Total

distribution cost was apportioned to milk and milk products based on total

sales value of milk and milk products. Distribution cost of all the dairy products

18

for private dairy plants was higher than cooperative dairy plant except for

flavored milk. It was due to higher sales commission paid by private dairy

plants as a sales promotion strategy to their commission agents. Both the

dairy plants should improve the distribution efficiency by increasing the

quantity of dairy products distribution.

Singh and Singh (2007) the study attempted to analyse milk

production, consumption and marketing through the dairy co-operative, Bihar

state Co-operative Milk Producers Federation Ltd. (COMPFED) and examines

the producer’s share in the consumer’s rupee of milk marketed through dairy

co-operatives. The study was based on data collected from 720 dairy

households spread over 60 villages of Pataliputra and Barauni Milk sheds of

Bihar. The data pertained to the year 2005-06.The analysis of the farm level

data of farmers revealed that the annual per household animal milk production

was as low as 1334 kg on sample households. About 83 per cent of milk

produced is sold and 17 per cent is consumed in the project area. The

producer’s share in the consumer’s rupee declined from 67 per cent in 2006

to 59 per cent in 2008 which needs to be increased through efficient

management of dairy plants and human resources. The co-operative

functionaries derived more benefits from increased consumer price of milk.

Hence, the dairy co-operatives seem to be unfriendly to farmers who sold milk

through institutional channels.

Heinrich and Eva (2009) studied the structural market model for the

Hungarian milk market. The results indicated that the abolition of export

subsidies in 2004 led to considerable market distortions. The processors were

able to exploit significant oligopsony power. However, the opportunities to

benefit from this favourable market position eroded rather quickly with the

development of alternative marketing channels for raw milk (exports to Italy).

The authors conclude that export subsidies had a negative welfare effect due

to foregone specialization gains since they postponed the development of

these markets.

19

Salem (2009) analysed the available Sheep Cheese supply chain:

Governance system of channels in the Badia of Jordan. The data was elicited

from archives, semi structured interviews, PRA (Participatory Rapid

Appraisal), and survey with 118 participants carried out during the months of

March-June 2007. The new trends have driven new organizational and

institutional changes that led to the rise and use of contracts. Contracts varied

in their attributes of delivery, prices, risk management, and provision of

services such as credit and technical assistance. For the TA Factory,

contracts remained unwritten and informal and did not set substantial

requirements for technology upgrading and investment. The study

recommends initiating written contracts for the benefit of the farmers as well

as that of produce quality and standards.

Wani and Wani (2010) examined the prevailing marketing system,

utilization, channels of distribution, processing/demand and supply scenario of

milk in Jammu and Kashmir. The study was based on the primary data

collected from 150 households rearing milch animals, 20 vendors and 20 milk

shops from each delineated agro-climatic zones, besides qualitative and

quantitative information obtained from co-operative/private dairy owners

involved in milk trade. Crossbred cows have been found to have higher

productivity than of buffaloes and indigenous cows. Marketed surplus as

percentage of total production varies from 68 per cent in intermediate zone to

73 per cent in sub-tropical zone. Producer share in consumer rupee has been

found highest in channels I and IV. The dairy cooperative, a most significant

market functionary in milk trade, is either missing or handles meagre quantity

of milk. The study of milk processing has revealed that profit per litre in

packaged milk is encouraging. Also, organized sector meets only 21.76 per

cent and 16.32 per cent demand of the cities and towns of Kashmir and

Jammu divisions, respectively.

Bardhan et al. (2012) analyzed the factors that determine dairy

farmers’ choice of marketing channel and to what degree their market choice

influence the level of commercialization or market participation in

Uttarakhand. The study has used multinomial logit model to ascertain major

20

factors influencing producers’ choice of marketing channels, Chow's seminal

test to examine differences between data from diverse regions (plains and

hills) and a multivariate regression model to assess the level of market

participation. The study has revealed that given the right institutional

incentives and market infrastructure, marginal and small landholders are

capable of scaling-up milk production and hence commercialize their dairy

enterprises. The results of multinomial logit analysis have indicated that

increase in the scale of milk production would lead a shift away from

cooperatives to market as point of first sale. Milk production and extension

contact have emerged as the two most important policy variables favourably

influencing intensity of market participation. Distance to market has negatively

influenced likelihood of producers’ market participation, irrespective of hills or

plains.

Koshta and Chandrakar (2012) had undertaken a study in Raipur

district of Madhya Pradesh to examine the disposal pattern of fluid milk of

different locations of dairy entrepreneurs. The study was based on primary

data collected from 30 members of MPCSs from three blocks of Raipur district

and 70 non-members (private dairy entrepreneurs) selected from five villages

in the jurisdiction of each MPCS area, grouped under small, medium and

large according to the number of milch animals owned by them. The disposal

of fluid milk by members to MPCS increased and there is an inverse

relationship between distance from the city and price of milk received through

hotels/motels and direct household consumers. It shows that dairies located

far off from the city faced the problems in marketing of milk. Members of

MPCSs have disposed of about 81 per cent of the total milk production to

MPCSs while it is about 18 per cent for the non-members of MPCSs. The

non-members also sold 1 per cent of their milk production to the middlemen. It

is directly related to the quantity of milk supplied by the dairy entrepreneurs

according to distance but price of milk is inversely related to the distance of

dairy entrepreneurs.

21

.Singh et al. (2012) conducted study on marketing pattern of milk in

Punjab state. The present study was conducted in three zones of Punjab state

viz, zone I (sub mountainous zone) zone II (central zone) and zone III (south

western zone). The sample of the study was based on multistage stratified

random sampling technique with zones, districts, blocks, villages and farmers

as the respective sampling units. The data were collected from the selected

farmers through personal interview method on a specially structured and pre-

tested schedule. It was found that there exist direct relationship between milk

yield / milch animal and herd size both in cows and buffaloes. The local

vendor (dodhi) was the most preferred mode for selling milk, followed by co-

operative societies, private milk plants & direct sale to consumer. The milk

prices differed considerably across the zones. Hence there is a need to

expand and popularize the organized purchase of milk through co-operative

societies so that the products can get remunerative price for milk.

Sarma and Barman (2013) in their study attempted to assess the

consumption and disposal pattern of milk in Barpeta district of Assam. For the

purpose data pertaining to the year 2013 were collected through schedules

and questionnaires from the sample farmers and cooperatives societies of

Bajali and Bhawanipur development blocks of the districts to assess the

performance of the member and non-member farmers of Dugdha Unnayan

Samabai Sammittees (DUSS). The study indicated that the percentage of

cross breed jersey cows was higher as compared to Holstein and local breeds

in all the villages and across all size groups of farms. Demand for cross breed

jersey cows have been increasing because of higher milk yield and

acceptable FAT and SNF content in the milk. Among the non-members the

small farmers largely sold milk directly to consumers and only 21.81 per cent

sold milk to restaurants and other retail outlets. Among the medium and large

farmers majority of the farmers (38.46 %) distributed milk through milk

venders, 33.84 per cent sold milk to milk retailers and 27.69 per cent sold milk

22

to different hotels and restaurants. The member farmers of DUSS directly sold

their marketable surplus to their respective societies and the societies in turn

sold a major portion to the west Assam milk union ltd. (wamul)

Kumar et al. (2013) studied the marketing behaviour of the dairy

farmers of the western region of Tamil Nadu. Two districts, namely, Erode and

Coimbatore, were selected purposively and the result was derived from 240

respondents. Majority of the respondents had medium level of marketing

behaviour, which is implied through six components, namely, milk transport

facilities’ utilisation pattern, milk marketing channel utilisation, availing of

input/credit facilities, payment receiving pattern, mode of payment for sale of

milk and price satisfaction of the respondents. The study analysed the dairy

farmers’ behaviour-related variables and also reflected the relationship of

characteristics with their marketing behaviour. It may be concluded that large

herd size and higher income possessed by the farmers ensure high marketing

ability among the respondents.

2.3 Cost and returns in milk production

Mukhtar and Dawson (1990) studied the relationship between herd size

and unit cost of production in the England and wales dairy sector. Following

the two-stage estimation procedure of Dawson and Hubbard (1987), long run

average cost (LAC) functions were estimated from cross-section data for five

separate years between 1976/7 and 1986/7. Results showed that the LAC

curves are U shaped but highly skewed, implying that considerable

economies of size are present at low output levels but dis-economies at larger

levels are much less marked. Over time, technological change in particular

has been shifting the LAC curves downward and the right and away from the

sector’s long-run equilibrium. The differential shift of cost curves, depending

on the size of production, implies that technological changes have been

biased in favour of large herds.

23

Shah and Singh (1995) studied costs and returns in crossbred cows in

rural and urban area of Barielly district of Uttar Pradesh. It is evident from the

study that the total cost per cow in one complete lactation was 5403.39, with

a total return of 8288.02 and net profit of 2884.63 in the rural area. The

results further revealed that the total cost, total return and net profit in urban

area were 5760.74, 9295.85 and 3535.09 respectively. Thus it is clear

from the study that the net profit was not only higher, but also the total costs

as well as total returns were also much higher in urban area as compared to

rural area

Biradar (1999) employed break even analysis technique in dairy

enterprise in Udyir taluk, Lathur district of Maharashtra. He observed that the

break even milk production among beneficiaries was 1291 lts at the given

price of milk i.e., 7.23 per litre further, the average BEP price per ltr of milk

was 7.55. He concluded that either milk producers should be able to procure

1291 lts for BEP level or the price should be raised from 7.23 to 7.55. The

prices paid to milk producers were not remunerative.

Rahman et al. (2003) studied the economics of dairy farming in six

divisions of Bangladesh during 2000-01. Tabular analysis was carried out to

work out cost and returns from milk. Annual rearing cost per animal accounted

to 14667.74 TK in group 1 (5-10 cows),18559.09 TK in group-2 (11-25 cows)

and the annual gross returns per farm per animal and net returns per milk cow

were TK 18899.77 and TK 25.99 respectively.

Sadiq et al. (2003) estimated cost and returns and factor productivity in

livestock enterprise in Northern Areas of Pakistan in 2003. A two-stage simple

random sample design was used to select the sample respondents. The first

stage included 20 villages and the second stage comprised 100 livestock

herders. All the respondents were personally interviewed using a

comprehensive interview schedule. The Cobb-Douglas production function

24

was applied to work out return to scale. The study revealed that the total

revenue from livestock mainly comprised of sale of milk, wool, farm yard

manure and sale of young stock per annum. On an average, revenue from

sale of milk was 363388 on large farms, 90831 on medium farms and

38487 on small farms. The major components of total cost were green and dry

fodder, veterinary medicines and labour. On an average labour costs were

25385, 44052 and 58708 on small, medium and large farms, respectively

and also livestock act as a full time enterprise.

Aslam and Khaushk (2004) analysed the economics of buffalo dairy

farms in Sindh district of Pakistan. They concluded that the total costs of dairy

farms were estimated as 26493810, 94658 and 2791760 for small,

medium and large farms, respectively. The net return of selected dairy farms

were analysed and found that average net return were 67134, 390482

and 1346580 per year respectively for small, medium and large farms.

Dixit et al (2004) studied the economics of milk production in five agro

climatic zones of Kerala. The primary data with respect of farm inventory,

production traits of Milch bovines, feeds and fodder fed, labour utilization,

production and consumption of Milk, value of various inputs and outputs,

expenditure on veterinary and other miscellaneous items etc. were collected

from 750 households. The data pertained to the year 2002-03. The results of

the analysis indicate that bovine husbandry forms an important component of

the typical homestead-farming situation in Kerala. The crossbreeding of cattle

has resulted in the spectacular performance of dairy sector in the state.

Jayachandra et al. (2004) conducted a comparative study of

economics of milk production in three states, viz., Chitoor district in Andhra

Pradesh, Erode district in Tamil Nadu and Kolar district in Karnataka involving

aspects related to existing cost structure of milk production, profitability of

crossbred dairy cows in the three states under the changed socioeconomic-

political scenario and also suggests methods to improve the viability and

25

profitability of these enterprises. The net profitability varied from 43 per cent in

Tamil Nadu, 70 per cent in Andhra Pradesh and 83 per cent in Karnataka.

The study has further brought out the fact that higher fat content provides

higher prices as milk is priced based on fat and solid not-fat (SNF) content by

dairies. Hence proper scientific breeding procedure is to be followed to

improve fat content in the milk as well as milk production per animal.

Rao et al. (2004) studied the economics of milk production in Kanpur

(Dehat) district of Uttar Pradesh. Two blocks from the selected district and five

villages from each selected blocks were selected randomly in proportion to

the number of farmers categorized under three size groups of 0-1, 1-2 and

above two hectares. The study revealed that the total maintenance cost of a

milch animal per lactation increased as farm size increased. On an average

the maintenance cost of milch animal during a lactation period came to

10278. Amongst all labour charges accounted for the highest share followed

by fodder and concentrates. The gross income from milk production was

higher on large farm because of excess utilization of concentrates by large

farmers. Input output ratio was the highest on small farm and it was

1:1.31.Elasticity of production for fodder was the highest followed by human

labour and concentrates for all farms.

Singh and Rekha (2004) studied the economics of production and

marketing of milk in the state of Uttar Pradesh. Linear and log-linear functions

were used to work out the estimates of factors affecting marketed surplus of

milk both for the private and cooperative systems. The results of the study

indicated that the feed and fodder cost was the most important item of the

total maintenance cost accounting for 55 to 65 per cent of the total cost in

zone-I and 51 to 66 per cent in zone-II. The net profit per day of a milch

buffalo was very low due to the higher maintenance and low milk yield of

milch buffalo on each herd size group in each zone of the state. The net profit

26

of milk production per buffalo per day was observed to be higher in the case

of small size group due to higher milk yield of milch buffaloes in this size

group as compared to medium and large herd size groups in both the zones.

The establishment of milk cooperative societies in the rural areas had positive

impact on the marketed surplus of milk. The study further showed that the

milk vendor being an important intermediary in milk marketing made huge

profits by adopting various types of malpractices. Underutilization of plant

capacity was the major factor for incurring losses by cooperative milk plant in

fluid milk marketing.

Thakur and Singh (2004) conducted surveys in the year 2002-03 to

assess the energy and cost requirement for milk production in different

commercial dairy farms in four locations, viz., Maharajpur, Imaliya, Pariyat and

Mohaniya, around the Panagar block of Jabalpur district, representing the

Kymore plateau and Satpura hills zone of Madhya Pradesh. The locations for

conducting the survey were selected at random without following any

statistical method as there are enough number of commercial dairy farms to

get a good comprehensive data on the different activities in milk production. It

was inferred that cattle raising was not only an important occupation for

supplying the nutritional diet to the people but also it has greater concern to

uplift the socio-economic status of the people related to agricultural sector.

Likewise raising goats, cows, buffaloes and birds as a supplementary

occupation in the agricultural sector is apparently most economical for the

development of socio economic status of rural people particularly in weaker

sections, having small and marginal holdings or low investment capacity and

tribal communities.

Dwaipayan et al. (2005) studied the economics of buffalo milk

production in Tarai area of Maharashtra which covers two blocks Udham

Singh Nagar and Rudrapur block and five villages from each block which were

selected randomly. It was revealed that returns occurred mainly from the sale

of milk (97%) and sale of manure (3.31%). The total cost of milk production

27

was more in case of large farmers (4&>4 ha of land) i.e. 21053.56/ha,

followed by medium farmers (2 to 4 ha) small farmers (1 to 2), landless

(having no land) and marginal farmers (<1 ha) i.e 20849/ha, 19773/ha,

19047/ha and 17071/ha respectively. And the total returns obtained was

more in large farmers ( 20237/ha) followed by small farmers ( 19513/ha),

medium farmers ( 19144/ha), marginal farmers ( 17225/ha) and landless (

18338/ha).

Hossain et al. (2005) studied the small scale dairy farming practice in

selected area of Bangladesh. The study conducted during 1999 revealed that

the cost of rearing of dairy cow was 67.50 taka per cow per day and the net

return was 17.70 taka per cow per day for crossbred cow.

Singh et al. (2005) studied the resource use efficiency of milk

production in Pusa block of Samastipur district. The study showed that the

labour cost per day per cow in crossbred was comparatively higher than local

cows. Feed was found to be the most important item amounting to 47 per cent

of the total maintenance cost followed by labour (34%).

Velangannis (2009) conducted a study on a comparative analysis of

the marketing efficiency of a co-operative dairy industry & a private dairy

agency in Coimbatore (T.N). An analysis was made at the micro level to

measure the marketing efficiency of co-operative dairy industry in comparison

with the private dairy agency. Data pertaining to different cost items were

collected from both the units. The analysis was done based on 2009-10 year

data. The cost of milk procurement includes cost on collection, transportation,

chilling and delivery of milk. To workout processing and distribution costs the

major dairy products such as toned milk, butter milk etc were considered from

both the units. The collected data were analysed to ascertain the marketing

cost, marketing margin and marketing efficiency of different dairy products

28

using tabular analysis and the marketing efficiency was worked out through

shepherd’s formula .The analysis shows that private dairy agency has been

performing well as compared to that co-operative unions. The unions have to

adopt appropriate strategies to minimize the marketing cost and maximize

marketing margin there by improving the marketing efficiency.

Bairwa et al. (2013) conducted a study on economics of milk marketing

at Jaipur Dairy Cooperative, Jaipur (Rajasthan) during the financial year 2009-

10. In this, an effort was made for economic analysis of marketing costs

incurred by Jaipur dairy in milk marketing. The study was based on

secondary data of Jaipur Dairy Cooperatives’ which were collected from the

monthly progress reports, audit reports and other related records of Rajasthan

Cooperative Dairy Federation, Jaipur Dairy Plant, Jaipur as well as from the

milk collection and chilling centers. In order to study the marketing cost which

includes the cost of collection and processing of milk , the data were collected

from Jaipur Dairy Plant on different aspects viz., chilling charges,

transportation cost and commission to milk collection cooperative societies,

water and electricity charges, repair and maintenance, depreciation and

interest on capital expenditure. The data were arranged in simple tabular form

and simple averages and per centages were computed, unit costs were also

calculated by dividing each cost incurred by the quantity of milk handled. It

has been found that the average total cost of milk collection spent by Jaipur

Dairy was 18.79 and the average total cost of milk processing was 2.33

during the year 2009-10.

Lengers et al. (2013) studied the relationships between the marginal

abatement costs (MAC) of greenhouse gas emission on dairy farms and

factors such as herd size, milk yield and available farm labour ,on the one

hand ,and prices, GHS indicators and GHG reduction levels, on the other. A

two-stage Heckman procedure was used to estimate these relationships from

a systematically designed set of simulations with a highly detailed mixed

integer bio-economic farm-level model. The resulting meta-models are then

29

used to analyse how MAC vary across farm level conditions and GHG

measures. We find that simpler GHG indicators lead to significantly higher

MAC, and that MAC strongly increase beyond a 1-5 per cent emission

reduction, depending on farm attributes and the chosen indicator. MAC

decrease rapidly with increasing farm size, but the effect levels off beyond a

herd size of 40 cows. As expected, the main factors driving gross margins per

dairy cow also significantly influence mitigation costs. The results indicated

high variability of MAC on real life farms. In contrast to time consuming

simulations with the complex mixed integer bio-economic programming

model, the meta-models allow the distribution of MAC in a farm population to

be efficiently derived, allow the distribution of MAC in a farm population to be

efficiently derived and thus could be used to upscale to regional or sector

level.

2.4 Problems faced by the dairy farmers in production and marketing of milk

Belli (1990) studied the problems encountered in dairying by Gavali

community in Dharwad taluk. He revealed that all of the respondents (100 %)

expressed the problem of depleted grazing lands and fodder problems, 91.67

per cent of them complained about water scarcity. Majority of the respondents

complained about inadequacy of market infrastructure for the marketing of

milk and milk products. The remedies suggested by them were allotment of

more land for growing fodder by the forest department, providing water

facilities by sinking open wells, tube wells or by constructing small tanks for

their animals, better milk price and establishment of veterinary hospitals near

their settlements.

Rajendran and Prabaharan (1993) undertook a study in Tamil Nadu to

know the problem in management of milch animals. They concluded that the

problems faced by the farmers were high investment costs, frequent illness of

buffaloes, high feed requirement and high veterinary treatment costs.

30

Rajesh et al. (1998) studied the constraints in dairy farming as

perceived by cattle owners of Meghalaya. Based on data collected from 56

dairy farmers in 1997/98 from two villages in Ri-bhoi District, Meghalaya, the

constraints to dairy management as an alternative source of income

generation in north eastern India were identified. These constraints were then

ranked in relation to feeding, disease prevention and control, breeding and

marketing.

Meena and Chauhan (1999) studied about the awareness of improved

dairy farming practices by farmers of Sawai Madhopur District of Rajasthan.

The study was conducted in eight villages in the Sawai Madhopur District

(Rajasthan) to determine the level of dairy farmers' knowledge of

management, breeding, feeding and health-care practices. On the basis of the

knowledge index devised, knowledge level was 56.04 per cent. This

knowledge level was considered to be inadequate to carry out profitable

farming, and was attributed to low educational levels and a high level of

illiteracy. Factors positively affecting knowledge level were: education, farm

size, land-holding, attitude towards dairy farming and economic motivation. It

was concluded that measures needed to be taken to improve both the

motivation of farmers and their educational level.

Meenakshi and Intodia (2000) in their study on Constraints perceived

by cattle owners in adoption of modern cattle management practices,

identified the major problems as perceived by cattle owners in adoption of

dairy practices as breeding problems – inadequate knowledge of breeding

practices (45.00%), high cost of cross bred cattle and superior quality bulls

(44.40%) and perception of artificial insemination as unnatural method

(37.00%), whereas feeding constraints were, poor irrigation facilities for

growing green fodder (48.10%) and high cost of concentrate (42.50%).

Management constraints were lack of knowledge in weaning new born calves

(80.00%), health constraints – lack of knowledge about cattle diseases and

their control (36.60%), lack of veterinary clinic and health care centres

(29.60%) and high cost of veterinary medicines (24.80%) and miscellaneous

31

constraints were lack of educational programmes on dairying (21.46%) and

lack of trained rural youth in village (20.70%).

Das et al. (2001) studied constraints in adaptation of improved dairy

farming practices and perceived training need of the WDCS members. A

questionnaire survey involving a sample of 178 dairy farmers in six blocks of

Cooch Behar district, West Bengal, India, was conducted to examine the

performance of dairy farming activities. The cattle and land ownership status

of the sample farmers were very poor. As to the commercialization of milk, the

farmers were not worried about the survival of the WDCS, rather they were

willing to make money by selling it to the open market (74.31%). They were

more or less serious about disease management although there are some

(20.22%) who were not taking any measure against diseases. Non-

remunerative price of milk (75.84%), poor socioeconomic status (57.87%) and

lower rate of milk provided by the cooperatives than the open market

(55.06%) were the important constraints expressed by the respondents. The

most essential training needs perceived by WDCS members concerned to the

time of artificial insemination (79.78%); management of cattle shed (74.16%);

fertility problem of animals (71.35%); disease prevention (66.85%);

vaccination (60.11%); balanced ration and its composition (56.74%); and

pregnancy diagnosis (53.25%).

Keshava and Mandape (2001) analysed the potentials and problems of

dairy farming in North Bihar. The study was conducted in four villages that

were not covered by milk producers' cooperative society to determine the

problems encountered in and prospects of dairy farming in Muzaffarpur

District of north Bihar (India). The randomly selected respondents were

composed of 100 farmers belonging to different landholding categories and

rearing at least one milk producing animal. Inadequate herd size, low milk

productivity and poor feeding practices characterized dairy farming in the

area. The major problems encountered included disease susceptibility of the

animals, costly cattle feeds and unavailability of veterinary facilities and

regular milk markets. These findings indicate that dairy farming in North Bihar

32

may potentially improve in terms of milk production and productivity by

ensuring the maintenance of proper herd size, better feeding practices and

provision of farmers with better veterinary aids and disease resistant animals.

The milk producers' cooperative society should expand its area to ensure that

farmers in North Bihar would have access to adequate veterinary services

and a regular milk market.

Vyas and Patel (2001) conducted a study on constraints faced by milk

producers in adoption of dairy technology in Panchmahals district of Gujarat

state. They reported that non-availability of loan facilities, non-availability of

artificial insemination and milk marketing facilities and no pasture land were

the main constraints faced by the milk producers.

Anujkumar et al. (2002) conducted a study on constraints analysis of

dairy farmers in Bihar. They reported that majority of dairy farmers faced

moderate constraints under different categories of constraints such as

management (80.47%), followed by breeding (66.41%), health care (55.47%)

and feeding constraints (53.12%).

Shaguna and Manjit (2002) identified the indigenous practices in dairy

farming in the Ropar District of Punjab. A survey was conducted to determine

the most common problems related to dairy animal health that the dairy

farmers encounter. Also, the respondents were asked to identify the traditional

practices they employ to cure these diseases. The most common problems

included bacterial and viral diseases, digestive and reproductive disorders

and parturition complications. The farmers employed herbal medications to

treat viral diseases. Experts classified the traditional practice of boiling

soyabean, fenugreek, ajwain and dried ginger to treat pneumonia as scientific

(100%). However, the experts deemed the practice of giving 'kikar' juice,

feeding 'chappati' and mustard oil to treat foot and mouth disease as

unscientific. The traditional practices of curing mastitis and other bacterial

33

diseases viz. feeding animal with milk, giving chutney of 'halo butti', were all

deemed as unscientific by the experts. For the treatment of constipation, the

farmers fed the animal’s fenugreek; this was found to be scientific by the

experts. All practices to counter reproductive disorders were classified by

experts as unscientific. The practice of feeding mustard oil to newly born

calves and feeding one-month-old calves with dried ginger powder mixed with

dough were found to be scientific by all the experts.

Aravindkumar and Vasanthakumar (2003) conducted a study on

constraints faced by small and marginal farmers in dairy farming as a

subsidiary occupation, they observed that the major constraints faced by

small and marginal farmers in dairy farming were low price of milk (96.67%

and100.00%), followed by high cost of feeds and fodder (93.33% and

100.00%), non-availability of land for fodder cultivation (86.67% and 96.67%),

less fat content in crossbred cow milk (70.00% and 96.67%), and non-

availability of loans and lengthy procedure (66.67% and 83.33%),

respectively.

Dhaliwal and Sukhpal (2003) studied dairy farming in Punjab Dairies

have acquired an increasing significance in the farm sector. In the era of

stagnation of yield in crop farming, dairies have been adopted as an

augmenting subsidiary occupation by the peasants of Punjab, India. The main

objective of this study was to examine the problems and policy suggestions

regarding dairy farming in Punjab. The study revealed that the main problems

being faced by the dairy farmers of Punjab were lack of good marketing

network, low price of milk, costly medicine and health care, lack of quality

breed animals and low price of young stocks. Therefore, good marketing

network and modern health care system and processing

units/slaughterhouses must be developed to compete in the global market.

Manoharan et al. (2003) in their study on constraints in milk production

faced by the farmers in Pondicherry union territory, observed that the major

constraints faced by farmers in dairy farming were higher feed cost, low price

34

for milk, high investment, infertility problem, low productivity, higher rate of calf

mortality, frequently becoming sick, inadequate availability of grazing lands,

costly veterinary treatment and aids.

Nagaraju and Gopal (2003) surveyed in West Godavari district of

Andhra Pradesh to study constraints in adoption of improved dairy farming

practices. There were serious constraints in adoption of improved dairy

farming practices such as nonexistence of milk cooperatives in the village,

lack of sufficient knowledge in different areas of improved dairy farming

practices, exploitation by middlemen, distant location of artificial insemination

centre or veterinary hospital and lack of good transportation facilities

Narendrareddy et al. (2003) in their study on constraints in dairy

farming in Prakasam district of Andhra Pradesh reported that non-availability

of good dairy animals, non-remunerative price for milk, high cost of

concentrates and non-availability of green fodder, high cost of dairy animals,

irregular payment for milk by procuring agencies, low water profiles and lack

of irrigation facilities and non-availability of good breeding bulls were the

major constraints in dairy farming.

Uma et al. (2003) studied the constraints in adoption of improved dairy

farming practices in Uttaranchal hills. Results showed that the major

constraints perceived by dairy farmers and farm women in adopting improved

dairy farming practices in the area were distant location of veterinary

institutions for treating the animals and absence of veterinary staff and lack of

technical inputs like medicines, vaccines and other essential inputs at the time

of need. The other constraints perceived by the respondents were lack of

resources to maintain either milch animals of good breed or providing costly

green fodder round the year to the dairy animals. Lack of awareness about

important aspects of improved dairy farming practices like right time of serving

animal after onset of heat, getting pregnancy diagnosis done after service and

proper time of serving animal after calving, identification of symptoms and use

of prophylactic measures for the common contagious diseases, colostrum

35

feeding and quantity of concentrate to be fed to the pregnant animals were

also identified as the important constraints.

Viekals (2003) studied the problems of dairy farming in Latvia with its

integration into the European Union. This study examined the constraints to

milk production, processing and marketing in Latvia, and presents proposals

for the development of dairy farming in light of the country's integration into

the EU. It is revealed that the fragmentation of herd and lack of financial

resources are the main constraints to the modernization of dairy farming in

Latvia. To increase the competitiveness of Latvian milk products, new product

development, marketing measures, and the optimization of milk processing

enterprises are suggested, among others.

Rabbani et al. (2004) carried out a study on participation of rural

women in dairy enterprise in a selected area of Bangladesh. The study found

that, the major constraints faced by the farmers in dairy farming were high

price of concentrates (90.00%) followed by insufficient of feed (74.00%), lack

of pasture land (70.00%), low price of milk and milk products (67.00%),

insufficiency of land (60.00%), suffering various diseases (52.00%), problem

of marketing (40.00%) and insuffiency of labour (40.00%).

Savita (2004) conducted a study on role of rural women in animal

husbandry. She revealed that majority of the respondents (93.33%) involved

in dairy expressed the non-availability of fodder as their main problem,

followed by water scarcity (90.00%), low cost of milk (83.33%) and costly

fodder/feed/ concentrate (63.33%). Very few of them (13.33%) expressed

frequent attack of diseases as a problem.

Bardhan et al. (2005) conducted a study on constraints perceived by

farmers in rearing dairy animals, they reported that no-remunerative price for

milk, testing of milk only on the basis of fat percentage, reproductive

problems, and distant location of AI centres and high cost feed were the

problems expressed by the respondents.

36

Chaudhary (2006) conducted a study on entrepreneurial behaviour of

dairy farmers. He reported that the general constraints expressed by dairy

farmers were susceptibility of animals to disease (46.00%), poor irrigation

facilities for growing fodder crops (42.00%), distant location of AI centres

(41.00%), lack of knowledge about silage preparation (36.00%) and non-

availability of improved fodder seeds (32.00%).

Mahendra and Anil (2006) studied the constraints faced by dairy farms

in Rajasthan. The main constraints observed by them were high cost of feeds

and fodder, poor availability of fodder and feed, limited financial resources,

lack of facilities for treatment, vaccine and medicines, lack of veterinary

dispensaries and poor knowledge of scientific management and animal health

care practices.

Agarwal et al. (2007) conducted a study on constraints in adoption of

cross breeding technology in different regions of India. They revealed that the

lack of progeny tested bulls (92.00%), non-availability of HYV seeds of

different fodders (84.00%), low fat contents in crossbreed cow milk (78.00%),

and high mortality in crossbreed young males (67.00%) and repeated

breeding (65.00%). Whereas, in Karnataka low fat content in crossbred cow

milk (96.00%) were the only serious constraints faced by dairy women.

Halakatti et al. (2007) in their study reported that, 74 per cent of the

respondents stated their constraint as non-availability of artificial insemination

facility followed by lack of loan facility (52.00%), lack of knowledge in

identifying diseases of animals (50.00%), non-availability of veterinary aid in

time (27.00%), high cost of commercial cattle feed (24.00%) and only 8.00 per

cent of the respondents faced constraint of non-availability of cattle feed.

Kadam and Wangikar (2008) conducted a study on constraints in

adoption of dairy management practices in Parabhani district of Maharsta. Out

37

of nine taluks of this district three namely Sonpeth, Palam and Gangakhed

were drawn randomly by lottery method. Two villages from each talukas were

selected. From each village three such SHG’s where the members of SHG’s

are following dairy management were chosen randomly by lottery method,

and thus a final sample consisted of 108 respondents, majority of the

respondents (75%) were only the members of SHG’s. The data was analyzed

using tabular presentation method. The results indicated that, the three top

most constraints expressed by the respondents were high prices of milch

animals, higher prices of animal feed and getting less prices of milk they sold.

Paul and chandel (2008) conducted a study on improving milk yield

performance of cross breed cattle in north-eastern states of India. The

proportion of cross breeds cattle in the region is 7.54 per cent as against

13.33 per cent for the country as a whole. However the productivity of cross

breed cattle has been found considerably low (4.82 litres/day) in the region as

against the all India average of 6.41 litres per day of milk yield. Yield gap

analysis has been applied to find out the intra-regional milk yield gaps & the

factors that could be addressed in the short –run to make up the deficit.

Based on the analysis it has been identified that the major Factors affecting

the milk yield of cross breed animals in the north-eastern states are the

technological and economic constraints which could be addressed by

adopting improved management practices, better feeding practices,

controlling of diseases and amelioration of the socio-economic constraints of

the farmers through training, education & enhancing access to the funds,

addressal of these constraints will increase actual milk yield by about 66 per

cent sufficient enough to meet the deficit of milk requirement in the region.

Category wise yield gap analysis has shown that the highest increase in milk

yield will be obtained on medium category households.

Patil et al. (2009) carried out a study on constraints faced by the dairy

farmers in Nagapur district while adopting animal management practices. The

38

study revealed that, majority 78.22 per cent of the respondents stated their

constraints as delay in milk payments followed by low milk production by local

breeds (72.44%), in adequate knowledge about diseases (68.00%),

inadequate money and lack of loan facility (63.11%), non-availability of

veterinary hospital (56.89%), high cost of concentrates and other feeds

(56.44%), high cost of high yielding breeds of animals (50.66%) and only

25.33 per cent of the respondents stated their constraint as lack of

preservation facility for milk.

Suresh (2009) conducted a study on impact of micro-finance on

empowerment of rural women – a case study on dairy enterprise in the tank

management project area of North Karnataka. The study revealed that no

scientific storage facility in village, sale on credit (monthly payment), milk

marketing require more time, high transportation cost, lack of processing

technology, lack of storage facility, non-availability of green fodder during

summer season were the major constraints faced by the rural women in dairy

farming.

Devaki and Senthikumar (2011) conducted a study on farm women

adoption constraints in livestock farming. The study observed that, high cost

of the animals; feed and medicine, inadequate/non-availability of credit, lack

of transportation facilities, and lack of storage facilities and non-existence of

regulated market in the locality were found to be the major constraints faced

by the farm women in livestock farming.

Kathiravan and Selvam (2011) analysed the constraints to livestock

production in Tamil Nadu. A total of 350 farmers, representing all the seven

agro-climatic zones were chosen adopting three stage random sampling

technique. Garret's ranking technique was adopted to analyse the problems

faced by farmers in the study area on rearing cattle of different categories,

buffaloes, sheep and goat. The constraints faced in rearing crossbred cows in

39

the order of their importance were excessive feed cost, followed by

inadequate price for milk and huge investment. Low productivity in desi cows

was the major constraint, followed by excessive feed cost, inadequate price

for milk. Lack of fodder and grazing facilities was the prime constraint in

buffalo farming followed by labour shortage and infertility problem. The

foremost constraint faced by overwhelming majority in sheep production and

in goat production was lack of fodder and grazing facilities.

Rathod et al. (2011) conducted a study on socio-economic profile and

constraints of dairy farmers. The study revealed that, majority (87.00%) of the

farmers reported non-availability of fodder round the year as a major

constraint followed by lack of timely veterinary services (84.00%), low price of

milk (82.00%), low productivity of local breeds (78.00%), lack of grazing land

(74.00%), lack of timely AI (72.00%), milking methods (53.00%) and difficulty

in heat detection (52.00%).

Reshma (2011) conducted a study on impact of BAIF promoted

livestock production activities on women empowerment in Karnataka. She

reported that majority of the respondents faced the constraints of high wages

demanded by labourers (95.83%), non-availability of man power (93.33%),

small land holdings (91.66%), risk of tying cattle in open space (90.00%),

difficulty in getting loan from banks (87.50%), lack of schemes to provide

loans (83.33%), the loan sanctioned was not adequate with a less repayment

period (78.33%), non-availability of green fodder throughout the year

(56.66%), lack of farm resource base (41.66%), inability to purchase milch

animals (40.00%), non-suitability of pure breeds (40.00%) and lack of faith in

adopting recommended livestock management practices (20.83%).

Binkadakatti et al. (2012) reported in their study that cent per cent of

the respondents expressed disease as their major constraint in dairy

management followed by pregnancy diagnosis (50.00%), cattle shed

maintenance (43.33%) labour problem (26.67%) and lack of fodder (20.00%).

40

Mohapatra et al. (2012) carried out a study on constraints faced by the

tribal entrepreneurs in dairy farming enterprise. The study revealed that, non-

remunerative price for milk (100.00%), high cost of concentrate (96.67%), lack

of availability of literature in the village (79.67%), high cost of crossbreed cow

/improved buffaloes (72.50%), highly expensive consultancy service of private

practionars (68.33%),poor marketing outlet of milk (65.00%) were the major

constraints faced by the tribal dairy entrepreneurs in dairy farming enterprise.

Patel et al. (2012) conducted a study on constraints experienced by

dairy farm women in adoption of dairy farming practices. The study revealed

that majority (97.14%) of the respondents face the constraints of inadequate

or lack of irrigation facilities for growing fodder non-availability of elite sire for

breeding purpose in village (91.42%), repeat breeding due to faulty AI

techniques (88.57%), lack of knowledge about control measure of clinical and

sub clinical mastitis (68.58%), inability in getting AT services at door steps

(51.43%) and constraint of lack of knowledge about importance of washing

under before and after milking (37.14%).

Kashappa (2013) conducted a comparative study on dairy and non-

dairy farmers in Belgaum district. The constraints expressed by dairy farmers

were: the majority of dairy farmers (87.50%) expressed non availability of

labour as a problem, followed by more than one third (86.11%) of dairy

farmers expressed that insufficient bank finance for purchase of milch

animals, more than half (52.78%) of dairy farmer faced lack of veterinary

facility in village, lack of training (51.39%), high cost of concentrate (48.61%)

and 45.83 per cent of dairy farmers expressed the problem of non-

remunerative price of milk.

Namratha et al. (2013) studied the adoption and constraints in

improved Goat rearing practices in Namakkal district of Tamil Nadu. From

each selected block, one village with maximum goat population was selected

and ten goat farmers from each selected village were selected randomly and

thus, a total sample of 140 goat farmers was constituted. The results revealed

41

that the adoption was high in deworming of kids and adults, identifying

animals in heat, feeding colostrum to new-born kids and feeding tree leaves to

goats. This showed that the adoption was high for the indispensable goat

farming practices which have major economic importance. Adoption was low

in vaccination against contagious diseases, artificial insemination in goats,

maintenance of records, providing mineral blocks, feeding neem leaves and

feeding crushed prosopsis and tamarind seeds. Non-availability of artificial

insemination service for goats in rural areas might be the reason for low level

of adoption.

Suresh et al. (2013) studied on constraints of dairy entrepreneurs in

Chittor district of Andra Pradesh in 2013. The Chittor district of AP was

purposively selected to study, since it is one of the leading district known for

dairy development activities like cross breeding, milk production and fodder

development. The ultimate sample of 240 milk producers representing 86

small (one milch animal), 94 medium (2 milch animal) and 60 large (3 or more

milch animal) farmers were selected from 16 villages with the help of stratified

sampling technique. The relevant data for the study were collected using pre

tested schedule designed for the purpose by survey method. The study

revealed that feed and fodder shortage, un-remunerative prices of milk were

the most severe problems faced by all three category of small, medium and

large farmers and also reported that high cost and non-availability of

concentrates mixture was equally frustrating problem.

Varaprasad et al. (2013) carried out a study on the socio-economic

profile and constraints faced by the farmers rearing Jersey*Sahiwal cows in

Chittor district of Andra Pradesh. The study observed that the major

constraints faced by the farmers in dairy farming were low price paid by the

procurement agencies per litre milk, high cost and non -availability of feed in

gradients, high incidence of repeat breeding, lack of sufficient grazing land,

non -availability of vaccines in time, non-availability of adequate medicines in

hospitals and incidence of the Theileriosis and Mastitis.

42

Bhoj et al. (2014) conducted a study on women dairy self-help group in

Uttarakhand/India: constraint identification in milk production and participation

in micro finance module. The study revealed that, the mean scores of the

main constraints (rank-1) faced by the members and non-members in scaling

up dairy production were high cost of cattle feed and mineral mixture (1.60

and 1.43), unavailability of indigenous bulls of high genetic merit (1.40 and

1.67), unavailability of emergency veterinary services (0.95 and 1.00), less

knowledge about marketing strategies (1.02 and 1.40), respectively.

Sowjanya (2014) carried out a study on management efficiency of dairy

farm women. The study reported that majority (88.33 %) of farm women faced

the constraints of low price of milk followed by, non- availability of green

fodder round the year (87.50%), low productivity of local breeds (80.83%), low

fat content in milk of local breeds (79.16%), lack of timely veterinary service

(75.00%), disease occurrence (60.83%), high cost of medicine and treatment

services (56.66%) and least per cent of respondents faced the constraints of

non-functional milk co-operative societies (20.00%).

43

3. METHODOLOGY

This chapter deals with the description of the study area, the sampling

procedure followed, the nature and sources of data and analytical tools and

techniques employed. The methodology is presented under the following

major headings.

3.1. Description of the study area

3.2. Sampling procedure

3.3. Nature and source of data

3.4. Analytical techniques employed

3.5. Definition of terms and concepts used

3.1 DESCRIPTION OF THE STUDY AREA

3.1.1. Karnataka

Karnataka state is one of the 29 states in India located in the southern

part of the country between 11�31” and 18�45” north latitude and 72�12”

and 78�40” east longitude. It is bordered by Maharashtra and Goa states in

the North, Andhra Pradesh state in the East and Tamil Nadu and Kerala

states in the south. On the west, the state opens to the Arabian Sea. The

state covers an area of 191976 sq. km which accounts to about 6 per cent of

the total geographical area of India.

3.1.2. Dharwad District

Dharwad district in Karnataka where the study was conducted consists

of five talukas namely Dharwad, Hubballi, Kalagatagi, Kundagol, and

Navalagund. Dharwad district falls in the northern part of Karnataka state. It is

situated in the interior of the Deccan peninsular and lies between the Northern

latitudes of 15°15’ and 15°35’and East longitudes of 75° and 75°20’. It is

bound on the North by Belgavi district, while on the South by Haveri district,

on the East by Gadag district and on the West by Uttar Kannada district.

44

INDIA KARNATAKA STATE

Fig. 3.1. Map showing the study region

Hubballi

45

3.1.3 Soils

Soils in Dharwad district comprise of red, medium black and deep black

soils. Similar types of soils are found in Dharwad taluk. Kalghatagi taluk

mostly comprised of red and medium black soils, in Navalgund, Hubballi and

Kundgol taluks, major part of soils comprised of deep black cotton soil.

3.1.4 Climate

The climate is generally dry and healthy, except during the monsoon

season. The hot season begins by March with the maximum temperature of

38°C and minimum temperature of 14°C during December, which is generally

the coldest month.

3.1.5 Rainfall

The South-West monsoons most crucial for Dharwad district. Average

annual rainfall of the district is 734.40 mm. Kalaghatagi taluk has an average

annual rainfall of 1104 mm, whereas Dharwad, Hubballi, Kundgol and

Navalagund taluks receive an average annual rainfall of 926.40 mm, 599.80

mm, 578.10 and 462.90 mm.respectively.

3.1.6 Land utilisation pattern

The net sown area of Dharwad, Hubballi, Kalaghatagi, Kundagol and

Navalgund taluk is 77294 ha, 50580 ha, 40043 ha, 59482 ha, and 83417 ha

respectively. The area under forest of Dharwad, Hubballi, and Kalaghatagi

taluk is 13676 ha, 2033 ha and 19526 ha.respectively. No forest cover is seen

in Kundagol and Navalgund taluk. The area not available for cultivation in

Dharwad, Hubballi, Kalaghatagi, Kundagol and Navalgund taluks is 9497 ha,

6642 ha, 4707 ha, 2307 ha and 3409 ha respectively.

3.1.7 Irrigation

The major sources of irrigation in Dharwad district are canals, tanks

and wells. However, the canal irrigation is not found in Dharwad, Kundgol and

Kalaghatagi taluks. The major source of irrigation in Dharwad, Hubballi and

46

Kalaghatagi taluk are bore wells. The total area irrigated in the Dharwad

district is 55089 ha. The area irrigated in Dharwad, Hubballi, Kalaghatagi,

Navalagundand Kundgol taluka is 11757 ha, 5770 ha, 4234 ha, 597 ha and

32731 ha.respectively.

3.1.8 Geographic and Demographic Features

The salient geographic and demographic features of the study area are

presented in Table 3.1. Dharwad district is having an area of 4263.00 sq. km.

Dharwad, Hubballi, Navalgund, Kalaghatagi and Kundagol taluks have an

area of 1032.00 sq. km, 631.00 sq. km, 1080.00 sq. km, 682.00 sq. km and

648.00 sq. km respectively. The total population of Dharwad district as per

2011 provisional censuses was 18.46 lakhs of which Dharwad taluk had 2.49

lakhs, Hubballi taluk 1.42 lakhs, Navalgund taluk 1.90 lakhs, Kalaghatagi taluk

1.54 lakhs and Kundgol taluk 1.65 lakhs population. The density of population

of Dharwad district was 377 persons per sq. km as against 219 persons, 217

persons, 163 persons, 201 persons and 242 persons per sq. km in Dharwad,

Hubballi, Navalgund, Kalaghatagi and Kundgol taluks respectively. The

literacy per cent in the district is 66.32 per cent and that of the taluks is 63.10

per cent, 64.70 per cent,66.80 per cent, 74.70 per cent and 74.40 per cent in

Dharwad, Hubballi, Kalghatagi, Kundgol and Navalagund taluks respectively.

The annual rainfall over the district is 787.20 mm. In the district there are

36383 marginal farmers, 49355 small farmers, 35123 semi-medium farmers,

19399 medium farmers and 2965 large farmers. The district has 158

commercial banks, 63 grameena banks, 12 urban cooperative banks 15 other

Cooperative banks and five P.L.D.Banks. Most of the rainfall over the district

is confined within the period from June-September. The maximum

temperature is 38°c. The temperature is very cool for the months of December

to January.

3.2.1 Selection of the study area and farmer respondents

Multistage sampling technique was adopted for selection of farmers for

the study. Dharwad district under University of Agricultural Sciences Dharwad

47

Table 3.1: Salient features of Dharwad district

Sl

No Particulars

Dharwad district

Dharwad Taluk

Hubballi Taluk

Kalghatgi Taluk

Kundagol Taluk

Navalgund Taluk

1. Geographical area (in 00’s sq. km)

4263 1032 631 682 648 1080

2. Population (No.)

i)Total 1846993 249912 228380 154767 165715 190177

ii) Rural population 797430 232672 118380 137851 146996 137346

iii) Urban population 1049563 17240 11000 16916 18628 52831

3. Population density (No. per sq km)

377 219 217 201 242 163

4. Literacy (%) 66.32 63.10 64.70 66.80 74.70 74.40

Male (No) 721440 90324 52750 53311 63516 72249

Female (No) 592913 67272 39515 38849 46760 53301

Total (No) 1314353 157596 92265 92160 110276 125550

5. Rainfall (mm) 787.20 868.00 732.00 980.00 716.00 643.00

6. Land holdings (No)

i) Marginal farmers 36383 9925 7548 6145 6891 5874

ii) Small farmers 49355 11686 8432 7808 9493 11936

iii) Semi-medium farmers

35123 8508 5929 5153 6146 9387

iv) Medium farmers 19399 4229 3399 1910 3218 6643

v) Large farmers 2965 598 550 171 530 1116

7. Banks branches (No.)

i)Commercial banks 158 47 90 6 6 9

ii) Grameena banks 63 22 20 7 6 8

iii) Urban cooperative banks

12 4 3 1 2 2

iv) Other cooperative banks

15 4 10 1 0 0

v) P.L.D. Banks 5 1 1 1 1 1

Source: Dharwad district at a Glance (2011-2012)

48

Dharwad (120)

Dharwad (24)

Lokur (12)

Tadakod (12)

Hubballi (24)

Hebasur(12)

Sulla(12)

Kalaghatagi

(24)

Belavantra(12)

Tavargeri (12)

Kundagol (24)

Kundagol (12)

Sanshi (12)

Navalgund

(24)

Morab (12)

Shalavadi (12)

Fig. 3.2 Sampling frame

49

Table 3.2 Dairy Cooperatives in Karnataka

Year/Center

Registered Dairy Cooperatives

No. of Dairy Cooperatives Covered Under

Number Membership

(‘000) Animal Health

programme Veterinary

aid

2010-11 12372 2083.44 10078 10177

20011-12 13006 2154.03 10557 9012

2011-12

1. Bangaluru 1920 337.42 1851 1339

2. Kolar 1809 274.94 1646 1646

3. Mysuru 1282 273.23 1241 960

4. Mandya 1053 231.21 1019 1019

5. Tumkuru 1005 232.30 932 835

6. Hassan 1323 187.98 638 493

7. Dharwad 868 127.85 450 450

8. Belgavi 468 77.20 419 346

9. Vijapura 433 44.12 120 120

10. Gulbarga 503 61.01 290 281

11. Dakshina Kannada

649 103.98 639 639

12. Shivamogga

974 123.95 854 641

13. Ballari 719 76.84 458 243

Source: Karnataka Co-operative Milk Producers Federation Ltd.

50

jurisdiction has the highest number of dairy cooperatives and is one of the

livestock rearing district which has got favourable condition for production of

different food and fodder crops. Hence Dharwad district was selected for the

study. There are totally five taluks in Dharwad district, viz., Dharwad, Hubballi,

Kalaghatagi, Kundagol and Navalagund and all these taluks were selected for

the study. Two villages from each selected taluk, where the Dairy farming is

widely practiced were selected randomly for the study. From each selected

village, 12 dairy farmers were selected randomly. Thus, the total sample size

for the study was 120 farmers.

Nature and sources of data:

The study was based on primary data. The primary data pertaining to

procurement of required inputs, veterinary services, marketing of milk, cost

and returns in milk production and the problems faced by the dairy farmers

were collected from the sample dairy farmers by personal interview method

using pre-tested schedule.

3.4 ANALYTICAL TOOLS AND TECHNIQUES

3.4.1 Tabular analysis

Tabular analysis involving the computation of means, percentages etc.,

was employed to analyse the data regarding demographic features, socio-

economic profile, and constraints expressed by the farmers.

3.4.2 Budgeting technique

To work out the cost and returns in milk production budgeting

technique was employed.

3.4.3 Functional Analysis

The Cobb-Douglas type of production function was used to study the

effect of various inputs on milk production on account of its well-known

properties like its computational simplicity that justify its wide application in

analysing production relations (Handerson and Quandt, 1971) and it being a

51

homogenous function provided a scale factor enabling one to measure the

returns to scale. The estimated regression coefficients represented the

production elasticities.

The form of Cobb-Douglas production function used in the present

study is as follows.

Y = aX1b1X2

b2X3b3 X4

b4eu _____________ (1)

Where,

Y= Gross returns

a = Intercept

x1= Concentrates

x2= Grains

x3= Dry fodder

x4= Green fodder

eu = Random error term

bi’s = Output elasticity’s of respective factor inputs, i = 1, 2, 3,4

The Cobb-Douglas production function was converted into log linear

form and parameters (coefficients) were estimated by employing Ordinary

Least Square Technique (OLS) as given below.

log Y = log a + b1 log X1 + b2 log X2 + b3 log X3 + b4 log X4 + u log e __ (2)

Returns to Scale

The returns to scale were estimated directly by getting the sum of 'bi'

coefficients. The returns will be increasing, constant or diminishing based on

whether value of summation of 'bi' is greater, equal or less than unity,

respectively.

3.4.4 Garrett’s ranking technique

This technique was used to evaluate the problems encountered in

Dairy farming. In this method, the farmers were asked to rank the given

52

problem according to the magnitude of the problem. The orders of merit given

by respondents were converted into ranks by using the following formula.

100 (Rij – 0.50)

Percentage Position = ——————

Nj

Where,

Rij= Rank given for ith item by jth individual

Nj= Number of items ranked by jth individual

The percentage position of each rank thus obtained was converted into

scores by referring to the table given by Garrett. Then for each factor the

scores of individual respondents were added together and divided by total

number of respondents for whom the scores were added. These mean scores

of all the factors were arranged in the order of their ranks and inferences were

drawn.

3.5 Definition of terms and concepts used in the study

a. Dry fodder:

Jowar, ragi and paddy straw were the main dry fodder fed to milch animals in

the study area. The data regarding the actual quantities fed to animals over

the year were collected from the respondents, and their market values were

calculated.

b. Green fodder:

The quantity and value of green fodder supplied to each animal every

year was collected in the study area. Green fodder included green grass,

jowar straw, burmuda grass, elephant grass etc. The market value for the

different green fodders was used to calculate the cost of green fodder.

c. Concentrates:

Concentrates are feeds, which have a comparatively high digestibility.

Concentrates provide protein for the growth of animal besides influencing the

fat content in milk. In the study area, mixtures of groundnut cake, rice brans,

53

feed mix supplied by the society and which is sold in market were mainly fed

to milch animals. Data regarding the actual quantities of each item of

concentrates fed over the year were collected and value was computed at

market prices.

d. Labour:

In the study area, the respondents employed all kinds of workers men,

women and children for grazing their animals and also for cleaning the

animals, cattle yard, and milking. The labour cost, which prevails in the study

area, was co nsidered to calculate the cost of the labour. The total cost of

labour for each herd was divided by the number of milch animals to get the

labour charges per animal.

e. Milk yield:

In order to estimate the annual milk yield for each animal, the following

procedure was followed. The average daily milk yield during the initial, peak,

and the last phase of lactation period were obtained. The total annual milk

yield was obtained by adding the total milk produced in each of these three

phases and the average price received per liter was multiplied by total yield to

get the value of milk yield per lactation.

f. Cost and return structure:

The information relating to costs incurred for milk production such as

green fodder, dry fodder, concentrate, veterinary charges, maintenance

charges, total milk produced, price obtained were collected to determine the

costs and returns from milk production. Tabular analysis was employed for

identifying cost-return structure of milk production.

g. Miscellaneous costs:

Miscellaneous costs include repair charges and marketing charges

actually paid by the sample farmers.

54

h. Interest on working cost

It is the interest on the entire working cost of the enterprise at the

prevailing rate for the lactation period.

i. Machine labour

The cost of machine labour both hired and owned was calculated for

differential rates for different type of operation prevailed in study area.

j. Interest on fixed cost

This was calculated for the enterprise at the prevailing rate for the book

value of the asset/ livestock, as the case may be for the study year.

Returns

The gross returns were calculated by taking the actual output prices

obtained by the farmers in the market. Net returns were calculated by

deducting the total cost of production from gross returns.

55

4. RESULTS

This chapter is devoted to the presentation and interpretation of the

results of the analysis of data collected for achieving the set of objectives of

the study and are presented under following heads.

4.1 Socio-economic characteristics of the dairy farmers.

4.2 Composition of the dairy animals of sample farmers.

4.3 Pattern of input services procurement by the dairy farmers from MPCS

and other agencies.

4.4 Pattern of milk marketing of the dairy farmers.

4.5 Cost and returns structure in milk production.

4.6 Resource use efficiency in milk production.

4.7 Problems faced by the members of milk producers co-operative societies

in production and marketing of milk

4.1 Socio-economic characteristics of the dairy farmers

The socio-economic profile of the sample dairy farmers with respect to

age, education, family size, type of family, occupation, experience in dairy

farming and land holdings are presented in Table 4.1. The study covered 120

dairy farmers spread over five taluks of Dharwad district viz. Dharwad,

Hubballi, Kalagatagi, Kundagol, and Navalagund covering two villages from

each taluk.

The results revealed that, majority of the farmers belonged to middle

age group in the study area. Of the sample dairy farmers 49.17 per cent

belonged to middle age group followed by old age (40.00 %) and young age

(10.83 %).

It is observed from the table that, clearly three size groups of sample

dairy farmers emerged i.e. small size (up to 4 members) medium size (5-8

members) and large size (> 8 members). Of the sample farmers 35 farmers

belonged to small dairy farmers category, 55 belonged to medium category

56

Table 4.1 Socio-economic characteristics of sample dairy farmers

Sl. No. Particulars Frequency Percentage

1 Age (years)

a Young age(<35 years) 13 10.83

b Middle age(35-54 years) 59 49.17

c Old age(>55 years) 48 40.00

Total 120 100

2 Education

a Illiterate 20 16.67

b Primary (up to 4th std.) 38 31.67

c Middle (5th to 7th std.) 23 19.17

d High school (8th to 10th std.) 15 12.50

e PUC 16 13.33

f Graduate and above (>12th std.) 8 6.67

Total 120 100

3 Family size

a Small (up to 4 members) 35 27.17

b Medium (5-8 members) 55 45.83

c Large (>8 members) 30 25.00

Total 120 100

4 Occupation

a Agriculture + Dairy 89 74.17

b Dairy + Others 19 15.83

c Agriculture + Dairy + Others 12 10.00

Total 120 100

5 Experience in dairy farming

a Low (up to 10 years) 28 23.33

b Medium (10 to 20 years) 83 69.17

c High (more than 20 years) 9 7.50

Total 120 100

6 Land holding

a Land less 5 4.17

b Marginal (up to 2.50 acres) 13 10.83

c Small (>2.50 acres to 5 acres) 29 24.17

d Semi medium (>5 acres to 10 acres) 29 24.17

e Medium (>10 acres to 25 acres) 25 20.83

f Big (>25 acres) 19 15.83

Total 120 100

57

and 30 belonged to large category. Further, it is also observed that in the

selected sample dairy farmers, majority of the farmers were educated. It is

clear from the table that good number of sample dairy farmers were exposed

to the primary education (31.67 %).Among the sample farmers 16.67 per cent

were illiterate, 31.67 per cent had primary school education, 19.17 per cent of

the farmers had middle school education, 12.50 per cent of the farmers had

high school education, 13.33 per cent of the farmers had pre-university

education, and 6.67 per cent of the farmers had attained the degree

education.

From the table it can also be seen that 10.83 per cent of the dairy

farmers possessed marginal land holding, 24.17 per cent of the farmers had

small land holding and semi medium land holding, 20.83 per cent of the

farmers had medium land holding, 15.83 per cent of the farmers had big land

holding, and 4.17 per cent farmers were landless. It is observed that 23.33 per

cent of the dairy farmers had low experience in dairy farming followed by

69.17 per cent had medium experience and 7.50 per cent had high

experience in dairy farming respectively. And it can also be seen that 74.17

per cent of the sample farmers had agriculture as a main occupation, 15.83

per cent of the farmers had dairy as a main occupation, and remaining 10.00

per cent farmers had other than agriculture and dairy as a main occupation.

4.2 Composition of the dairy animals of sample farmers

The details regarding total number of and type of animals and the value

of the animals possessed are presented in Table 4.2.

It is observed from the table that the number of local bulls were two

and the value of these bulls was 75000.00, local cows were eight and their

value was 91000.00. The number of cross breed bulls and cows were six

and 218 respectively and their values were 300000.00 and 5638800.00

respectively. The number of local male, female buffaloes were 16 and 64

respectively and their values were 49500.00 and 1582000.00 respectively.

The cross breed male and female buffalos were five and 13 in number and

their values were 28250.00 and 412000.00 respectively.

58

Table 4.2. Composition of dairy animals of sample farmers

Sl. No.

Type of animals

Total no.

of animals possessed

Total value of the animals possessed

( )

1 Cows

a Local

i Bulls 2 75000.00

ii Cows 8 91000.00

b Cross breed

i Bulls 6 300000.00

ii Cows 218 5638800.00

2 Buffaloes

a Local

i He buffaloes 16 49500.00

ii She buffaloes 64 1582000.00

b Cross breed

i He buffaloes 5 28250.00

ii She buffaloes 13 412000.00

59

Farm Asset Possession of the Farmers

The average farm assets possession of the sample dairy farmer is

presented in table 4.3.It is revealed that farm assets of the sample farmers

composed of different farm implements, farm machinery and farm building.

The value of all farm implements, farm Machinery and farm building was

3739.00, 379407.00 and 235000.00 respectively.

4.3 Pattern of input services procurement by the dairy farmers from MPCS

and other agencies

4.3.1 Input services procurement by the dairy farmers from MPCS

Data regarding the various input supply services provided by the dairy

societies to the sample farmers were collected analysed and are presented in

Table 4.4

The input supply services like feed, fodder, veterinary services, loan

facilities and milk cans were analysed in terms of average quantity of

procurement and frequency of procurement. It showed that in case of feed out

of 120 sample dairy farmers surveyed 110 (91.67 %) farmers procured the

feed from the society and the average quantity of feed purchased by a

member from the society was 485 Kg per annum. The frequency of

procurement differed, of the 110 farmers procuring feed from the MPCS 61

members procured monthly, 29 members procured fortnightly and another 20

members procured weekly. Whereas only 14 members purchased fodder from

the society. The average quantity of fodder purchased by a member was four

quintals per annum. The society could extend veterinary services to the needy

25 members. The loan facilities of the MPCS were availed by 24 members.

The average amount borrowed by a member was 18125 per annum. The

society also helped the members to purchase milk cans. This facility was

availed by 86 members. Each of these members purchased a milk can from

the society.

60

Table 4.3. Farm Asset Possession of the Farmers

Sl. No. Particulars Average No. Value

1 Farm Implements

a Iron plough 0.80 1025

b Wooden plough 0.65 560

c Spade 1.50 428

d Harrows 0.82 1146

e Sickle 1.95 382

f Axe 0.98 198

Sub total - 3739

2 Farm Machinery

a Tractor 0.80 346588

b Bullock Cart 0.76 4286

c Sprayer 0.68 3365

d Irrigation pump sets 0.50 21200

e Chaff cutter 0.81 3968

Sub total 379407

3 Farm building 0.86 235000

4 Grand total (1+2+3) - 618146

61

Table 4.4 Pattern of input services procurement by the dairy farmers from

MPCS

Sl. No.

Services Unit

Average quantity

procured per annum

No. of members procured

1 Feed Kg 485 110

2 Fodder Qtls 4 14

3 Veterinary Services

1321.12 25

4 Loan facilities 18125 24

5 Milk Cans No. 1 86

62

4.3.2 Input services procurement by the dairy farmers from other agencies.

The pattern of inputs services procurement by the dairy farmers from

other agencies is presented in table 4.5. The number of dairy farmers opting

to purchase inputs from other agencies other than MPCS was less. And even

the quantities purchased were also less. Of 120 sample farmers only 24

farmers purchased feed from the other agencies. The average quantity of

feed purchased by a farmer was 202 Kgs per annum. The fodder was

purchased from other agencies only by 12 farmers and the average quantity

purchased was 4.30 quintals per annum. From the society 86 farmers had

purchased the milk cans and remaining 40 farmers purchased the milk cans

from other agencies. Each of the member could purchase one milk can.

Veterinary services and loan facilities were not extended to the farmers by

these agencies.

4.3.3 Opinions of sample farmers regarding services extended by Milk

Producers Co-operative Societies in the study area

The opinion survey was conducted to know the quality of services

provided by MPCS to the members and the results are presented in the table

4.6. The opinion of members were collected on ten different aspects viz.,

supply of inputs, correct weighment, better prices, grading (fat %), loan to

purchase milch animals, regular payments, relationship with MPCS, training to

members, protecting consumers interest and market news which were

measured in three point continuum scale as highly satisfactory, satisfactory

and not satisfactory.

The survey indicated that 76.67 per cent of the farmers expressed as

highly satisfactory for the supply of inputs, remaining 23.33 per cent

expressed as satisfactory and no farmer expressed as not satisfactory.

Regarding correct weighment 30.00 per cent respondents expressed as

highly satisfactory, 45.00 per cent expressed as satisfactory and 25.00 per

63

Table 4.5 Pattern of input services procurement by farmers from Other Agencies

Sl. No.

Services Unit Average quantity procured per

annum

No. of members procured

1 Feed Kg 202 24

2 Fodder Qtls. 4.30 12

3 Veterinary Services

- -

4 Loan facilities - -

5 Milk Cans No. 1 40

64

Table 4.6 Opinion of sample farmers regarding services extended by MPCS in the study area

Sl. No.

Services Highly

Satisfactory Satisfactory

Not Satisfactory

1 Supply of inputs 46 (76.67) 14 (23.33) 0 (0.00)

2 Correct weighment 18 (30.00) 27 (45.00) 15 (25.00)

3 Better prices 16 (26.66) 20 (33.34) 24 (40.00)

4 Grading (fat % ) 12 (20.00) 30 (50.00) 18 (30.00)

5 Loan to purchase milch animals

8 (13.34) 13 (21.66) 39 (65.00)

6 Regular payments 12 (20.00) 40 (66.67) 8 (13.33)

7 Relationship with MPCS 17 (28.34) 30 (50.00) 13 (21.66)

8 Training to members 10 (16.66) 18(30.00) 32 (53.34)

9 Protecting producers interest 18 (30.00) 27 (45.00) 15 (25.00)

10 Market news 0 (0.00) 14 (23.33) 46 (76.67)

65

cent of the farmers expressed as not satisfactory. Majority (40 %) of the

sample respondents were not satisfied with the prices, 33.34 per cent said as

satisfied and remaining 26.66 per cent said as highly satisfied. Majority of

them (50 %) were satisfied with grading system for milk. Loan for purchase of

milch animals was not at all satisfactory for 65.00 per cent of the respondents,

21.66 per cent farmers expressed as satisfactory and 13.34 per cent farmers

expressed as highly satisfactory.

With regard to regular payments and relationship with MPCS the

majority of the respondents were satisfied i.e. 66.67 per cent and 50.00 per

cent respectively. With regard to the training, the majority of the farmers were

not satisfied (53.34 %), 16.66 per cent expressed it as highly satisfactory, only

30.00 per cent of the farmers opined as satisfied. In case of protecting

consumers interest 45.00 per cent of the farmers were satisfied remaining

30.00 per cent said highly satisfied and 25.00 per cent said not satisfied. With

regard to the market news, 76.67 per cent farmers expressed as not satisfied,

23.33 per cent farmers opined as satisfied and no single farmer expressed as

highly satisfied.

4.4 Pattern of marketing of milk and milk products by the dairy farmers

4.4.1 Pattern of sale of milk

The pattern of sale of fluid milk by the sample dairy farmers to the

different agencies is presented in the table 4.7. It can be observed from the

table that all the 120 sample farmers sold the milk to the dairy cooperative

society. The average quantity of milk sold differed according to the stage of

lactation period.

In the initial period of lactation they sold 5.14 litres in the morning and

5.07 litres in the evening. In the middle period of lactation they sold 5.00 litres

in the morning and 4.76 litres in the evening. Whereas in the end period of

lactation the quantity of milk sold decreased. They sold 4.65 litres in the

morning and 4.30 litres in the evening. Coming to the number of days for

66

Table 4.7. The pattern of milk marketing by the dairy farmers

Sl. No.

Agency and lactation period

Average quantity of milk marketed (litre/day)

No. of days

marketed

No. of members marketed

Morning Evening Total

A Co-operative society 120

i Initial period of lactation

5.14 5.07 10.21 73

ii Middle period of lactation

5.00 4.76 9.76 71

iii End period of lactation

4.65 4.38 9.03 68

Total 14.79 14.21 29 212

B Local consumers 26

i Initial period of lactation

4.36 3.76 8.12 75

ii Middle period of lactation

3.92 3.71 7.63 72

iii End period of lactation

3.34 2.80 6.14 60

Total 11.62 10.27 21.89 207

C Sweet shops and hotels

6

i Initial period of lactation

5.33 4.50 9.83 76

ii Middle period of lactation

5.33 4.16 9.49 69

iii End period of lactation

4.16 2.66 6.82 60

Total 14.82 11.32 26.14 205

67

which the milk was sold it was 73 days in the initial period of lactation which

was decreased to 71 days in the middle period of lactation and to 68 days in

the end period of lactation.

Apart from selling to the society some farmers sold fluid milk to the

other agencies also. Some 26 dairy farmers sold milk to local consumers.

Here also the quantity of milk sold differed according to the stage of lactation.

In the initial period of lactation a farmer sold 4.36 litres of milk in the morning

and 3.76 litres of milk in the evening. In the middle period of lactation this

quantity was decreased to 3.92 litres and 3.71 litres respectively. In the end

period of lactation they could sell only 3.34 litres in the morning and 2.80 litres

in the evening. They sold to local consumers for 75 days in the initial period of

lactation, for 72 days in the middle period and for 60 days in the end period.

Only six farmers sold part of their milk production to sweet shops and hotels.

In the initial period of lactation they sold 5.33 litres in the morning and 4.50

litres in the evening. In the middle period of lactation they sold 5.33 litres in

the morning and 4.16 litres in the evening. In the end period of lactation this

quantity was decreased to 4.16 litres in the morning and 2.66 litres in the

evening. In the initial period of lactation they sold milk to these shops for 76

days whereas in the middle and end period it decreased to 69 days and 60

days respectively.

4.4.2 Pattern of sale of milk products

The Table 4.8depicts the pattern of sale of milk products like curd and

butter to different agencies like hotels, sweet shops and household

consumers.

It is observed that some 21 milk producers sold milk products. On

average about 2.02 litres of curd was sold to hotels and sweet shops and 0.71

litres of curd was sold to household consumers by these 21 farmers for a day.

With respect to butter ten milk producers sold 2.20 kg butter to hotels and

sweet shops and 1.80 kg to the household consumers per day

68

Table 4.8 Pattern of sale of milk products

Sl. No.

Product Agency to whom sold No. of

farmers sold

Unit

Total quantity sold per

day

1 Curd Hotels and Sweet shops

21 Litres 2.02

Household consumers Litres 0.71

Total 2.73

2 Butter Hotels and Sweet shops

10 Kgs 2.20

Household consumers Kgs 1.80

Total 4.00

69

4.5 Cost and returns structure for milk production

4.5.1 Cost involved in milk production (per animal/annum)

The costs incurred on various inputs in milk production are presented

in the table 4.9. The major items of cost were dry fodder, green fodder,

concentrates, grains, labour and veterinary medicines. The total cost incurred

in milk production was 42342.85 per annum. The total cost included total

variable cost and total fixed cost. Of the total cost, the total variable cost was

found to be 38421.77 while, the total fixed cost was found to be 3921.08.

Among the variable costs, the maximum cost was incurred on grains

( 11968.00) followed by concentrates ( 8232.00), labour( 7500.00), dry

fodder ( 3384.60), green fodder ( 3170.00) and veterinary medicines (

1321.12) Among the fixed cost, the cost incurred was mainly on depreciation

of buildings and animals i.e. 1850.00 and 1666.66 respectively.

4.5.2 Returns from milk production (per animal/annum)

Returns from milk production are presented in the table 4.10. It is

evident from the table that gross returns from milk production were 52875.00

per animal per annum. The grass returns were obtained from three items,

from sale of milk ( 39125.00), sale of manure ( 3750.00) and sale of young

ones ( 10000.00). The net returns realized in milk production were

10532.15 and the B:C ratio was found to be 1.25.

4.6 Resource use efficiency in milk production

For the sample dairy farmers considered for the study, the resource

use efficiency in milk production was analysed by fitting Cobb-Douglas type of

production function to the data. This tool was used to estimate the functional

relationship between the dependent variable and independent variables. The

marginal value product of each explanatory variable was also computed and

compared with its marginal factor cost to know the resource use efficiency of

farmers and presented under the following heads.

70

Table 4.9 Cost involved in milk production (per animal/annum)

Sl. No.

Particulars Unit Quantity/year Cost/year ( )

I Variable cost

1 Green fodder Kg 6340.00 3609.60

2 Dry fodder Kg 2256.40 2945.00

3 Concentrates Kg 686.00 8232.00

4 Grains Kg 1408.00 11968.00

5 Labour MDs 32.50 7500.00

6 Veterinary medicines - 1321.12

7 Interest on working cost (8%)

2846.05

Total variable cost 38421.77

II Fixed cost

1 Depreciation on Buildings

1850.00

2 Depreciation on animals

1666.66

3 Interest on fixed cost (11.5%)

404.42

Total fixed cost 3921.08

Total cost ( I + II ) 42342.85

71

Table 4.10 Returns from milk production (per animal/annum)

Sl. No.

Particulars Unit Quantity/year Returns/year ( )

1 Sale of milk Kg 1565 39125.00

2 Sale of manure Tonn 3 3750.00

3 Sale of young ones

Nos. 1 10000.00

Gross returns 52875.00

Net returns 10532.15

B:C ratio 1.25

72

4.6.1 Cobb-Douglas Production Function estimates in milk production

The regression coefficients of various resources used in milk

production by dairy farmers are presented in the table 4.11. From the results,

it is found that regression coefficients of all resources were positive except

grains (-0.113). In this production function, the regression coefficients of

concentrates and green fodder were found to be statistically significant at 5

per cent level of significance and for other resources like grains and dry

fodder they were found to be non-significant.

The coefficient of multiple determination (R²) was 0.802 indicating good

fit of the model. The returns to scale (0.818) were found to be decreasing.

4.6.2 Allocative efficiency of resources in milk production.

To study the resource use efficiency of various resources used in

the milk production the MVP:MFC ratios were worked out and are presented

in the Table 4.12

The ratio of MVP to MFC was greater than unity for resources such as

concentrates (2.94) and green fodder (1.35) which indicate the

underutilisation of these resources but for grains and dry fodder MVP:MFC

ratios were found to be less than one indicating that they were over utilised.

4.7 Problems faced by the members of milk producers co-operative societies

in production and marketing of milk in the study area

4.7.1 Problems faced by the milk producers in production of milk.

Opinions of farmers on the problems in producing milk were elicited

right from the purchase of milch animals and inputs in the production of milk.

The Garette ranking technique was used to rank these problems. The results

of the analysis of these opinions are presented in table 4.13.

73

Table 4.11: Cobb-Douglas Production Function estimates

Sl. No.

Particulars Parameters Coefficients

1 Intercept A 3.629

2 Concentrates (x1) b1 0.611**

3 Grains (x2) b2 -0.113

4 Dry fodder (x3) b3 0.120

5 Green fodder (x4) b4 0.200**

6 Returns to scale 0.818

7 R² 0.802

Note: ** significance at 5% level.

.

74

Table 4.12 Allocative efficiency of resources in milk production

Sl. No. Particulars MVP MFC MVP:MFC

1 Concentrates 2.94 1 2.94

2 Grains -1.21 1 -1.21

3 Dry fodder 0.17 1 0.17

4 Green fodder 1.35 1 1.35

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Table 4.13. Problems faced by the dairy farmers in milk production

Sl. No

Constraints Garrett

total score

Garrett mean score

Rank

1 High cost of cattle feeds and lack of good quality concentrates

6449 53.74 I

2 Non availability of emergency veterinary services and artificial insemination facilities

6325 52.93 II

3 High cost of cross-breed cattles 5826 48.55 III

4 Non availability of improved breeds for milching

5782 48.18 IV

5 Non availability of pasture land for grazing

5715 47.62 V

6 Lack of technical know-how 5009 42.49 VI

76

The perusal of the table revealed that, high cost of cattle feeds and

lack of good quality concentrates was the major problem which ranked I with a

mean score of 53.74. Unavailability of emergency veterinary services and

artificial insemination facilities was ranked II with a mean score of 52.93. High

cost of cross-breed cattles ranked III with a mean score of 48.55.

Non availability of improved breeds for milching was ranked IV with a

mean score of 48.14. Lack of grazing land was another problem in milk

production which ranked V with a mean score of 47.62. Lack of technical

know-how was one of the constraint in milk production. This problem was

ranked VI with a mean score of 42.49

4.7.2 Problems faced by milk producers in marketing of milk.

The problems faced by the dairy farmers in marketing of milk were also

elicited from the sample dairy farmers and were subjected to analysis through

Garette ranking technique and the results are presented in table 4.14

Farmers opined that the price fixed by milk producers cooperative

society for milk was not remunerative. This problem was ranked I with a mean

score of 51.81. Farmers also expressed their dissatisfaction over the grading

of milk. Improper grading was ranked II with a mean score of 51.68.

Farmers opined that there was prevalence of malpractices in

measurement of milk. This problem was ranked III with a mean score of

51.16. Farmers experienced the difficulty in getting the payment for their

produce in time. This problem of delayed payment of sale proceeds of the

produce was ranked IV with a mean score of 47.13.

77

Table 4.14. Problems faced by the dairy farmers in marketing of milk

Sl. No

Constraints Garrett

total score

Garrett mean score

Rank

1 Low procurement price 6218 51.81 I

2 Improper grading of milk 6202 51.68 II

3 Mal practices followed in measurement of milk

6140 51.16 III

4 Delayed payment of sale proceeds of the produce

5656 47.13 IV

78

5. DISCUSSION

The milk producers co-operative society in betterment of dairy farmers

raises many interesting issues like inputs procurement, milk marketing,

returns to investment, problems faced in dairy enterprises etc. The results of

the investigation presented in the previous chapter are discussed here. The

main focus here is to throw light on some of the causes responsible for the

major trends observed in the results chapter. The analysis of the main trends

in terms of their causes and also in terms of discussion would help in

identifying some of the policy measures which could be adopted to overcome

the constraints from which the society and farmers suffered. The results are

discussed under the following heads.

5.1 Socio-economic characteristics of the dairy farmers.

5.2 Composition of the dairy animals of sample farmers.

5.3 Pattern of input services procurement by the dairy farmers from MPCS

and other agencies.

5.4 Pattern of milk marketing of the dairy farmers.

5.5 Cost and returns structure in the milk production.

5.6 Resource use efficiency in milk production.

5.7 Problems faced by the members of milk producers co-operative societies

in production and marketing of milk.

5.1 Socio-economic characteristics of the dairy farmers.

The socio-economic characteristics of the sample dairy farmers in the

study area have been depicted in Table 4.1 and are discussed here.

With respect to the age of the sample farmers, it is observed that most

of the sample farmers were of middle age group (49.17 %).The reason for the

above result may be the fact that dairying is a recurrent income generating

programme and it adds significantly to the family income. The income from

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dairy is assured unlike agriculture which is uncertain one. Therefore most of

middle aged farmers are taking up dairying as subsidiary occupation.

With regard to education level of the sample respondents, it was

noticed that 16.67 per cent of the farmers were illiterates. Among literates,

education level of sample respondents ranged from primary to degree level.

This indicated that literacy level (83.33 %) in the study area was higher.

Hence, the farmers’ receptive capacity eased the process and adoption of

new technology. And on the other hand to take care of the illiterates, there is

need for the extension workers to educate the farmers regarding recent

developments in dairy, agriculture and other enterprises to increase their level

of income and productivity on the farm.

It is observed from the table that, clearly three size groups of sample

dairy farmers emerged i.e., small size (up to 4 members), medium size (5-8

members) and large size (> 8 members). Of the sample farmers 35 farmers

belonged to small dairy farmers category, 55 belonged to medium category

and 30 belonged to large category. Which means in the study area 5-8

members were commonly found in a family and majority (75 %) of the farmers

belonged to nuclear family. This might be due to their awareness regarding

the increased cost of living and difficulties in maintenance of big family and

they might have found to have medium families to lead better and comfortable

life. The predominance of nuclear family was due to the realization of

advantages of nuclear family in terms of running family, fewer responsibilities,

privacy and more freedom of action in taking family decisions.

From the table it could also be seen that 10.83 per cent of the dairy

farmers possessed marginal land holding, 24.17 per cent of farmers had small

land holding and semi medium land holding, 20.83 per cent of farmers had

medium land holding, 15.83 per cent of farmers had big land holding, and

4.17 per cent farmers were landless. The results revealed that the majority of

the sample farmers belonged to small and medium farmers category.

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The occupational pattern of the sample farmers practicing agriculture

as main occupation with dairy as a subsidiary occupation accounted for 74.17

per cent, dairy as main occupation contributed about 15.83 per cent and

farmers practicing other than agriculture and dairy as main occupation were

10.00 per cent.

With respect to experience in dairying majority of the respondents

(69.17 %) had medium experience in dairying followed by low level

experience (23.33%) and high level experience (7.50 %), respectively. The

reason for this may be due to the fact that in recent decades it is found that

more and more farmers are gradually taking interest in dairying as an

enterprise. They also have exposure to various types of training programmes

conducted by concerned departments of the government on dairy farming.

5.2 Composition of the dairy animals of sample farmers

In the study area, there were dairy animals and draught animals

reared. Among these, dairy animals were reared by all the sample dairy

farmers. Hence, dairy farming forms a major component of the study area.

The details regarding total number of and type of animals and value of the

animals possessed by the sample farmers are presented in Table 4.2.

It is observed from the table that the number of local bulls were two

and the value of these bulls was 75000.00, local cows were eight and their

value was 91000.00. The number of cross breed bulls and cows were six

and 218 respectively and their values were 300000.00 and 5638800.00

respectively. The number of local male, female buffaloes were 16 and 64

respectively and their values were 49500.00 and 1582000.00

respectively. The cross breed male and female buffalos were five and 13 in

number and their values were 28250.00 and 412000.00 respectively. It

was observed that the members of the study area had more cows than

buffaloes. It is clear that farmers would maintain more of cows than buffaloes

because cows give more milk yield which results in higher returns to the

farming community.

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5.3 Pattern of input services procurement by the dairy farmers from MPCS

and other agencies

5.3.1 Input services procurement by the dairy farmers from MPCS

The results on input supply services provided by the dairy societies to

the sample farmers are presented in Table 4.4 and are discussed here.

The input supply services like feed, fodder, veterinary services, loan

facilities and milk cans were analysed in terms average quantity of

procurement and frequency of procurement. It showed that in case of feed out

of 120 sample dairy farmers surveyed 110 (91.67 %) farmers procured feed

from the MPCS. The average quantity of feed purchased by a member from

the society was 485 Kg per annum. The frequency of procurement differed. Of

the 110 farmers procuring feed from the MPCS 61 members procured

monthly, 29 members procured fortnightly and another 20 members procured

weekly. Whereas only 14 members purchased fodder from the society. The

average quantity of fodder purchased by a member was four quintals per

annum. The society could extend veterinary services to the needy 25

members. The loan facilities of the MPCS were availed by 24 members. The

average amount borrowed by a member was 18125 per annum. The society

also helped the members to purchase milk cans. This facility was availed by

86 members. Each of these members purchased a milk can from the society.

Thus milk producers cooperative societies are extending all types of

services required by the dairy farmers. This has helped the dairy farmers to

run their enterprise efficiently and to increase production of milk and there by

their income. Still there are some lacunae in the services provided by the

MPCS.

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5.3.2 Input services procurement by the dairy farmers from other agencies

The pattern of inputs services procurement by the dairy farmers from

other agencies is presented in table 4.5. The number of dairy farmers opting

to purchase inputs from other agencies other than MPCS was less. And even

the quantities purchased were also less. Of the 120 sample farmers only 24

farmers purchased feed from the other agencies. The average quantity of

feed purchased by a farmer was 202 Kgs per annum. The fodder was

purchased from other agencies only by 12 farmers and the average quantity

purchased was 4.30 quintals per annum. From the society 86 farmers had

purchased the milk cans and remaining 40 farmers purchased the milk cans

from other agencies. Each of the member could purchase one milk can.

Veterinary services and loan facilities were not extended to the farmers by

these agencies.

This difference is due to the price and non-price benefits found to be

varied; the price differential paid by other agencies is less and MPCS’ is more.

And the study generalises that none of the agencies is capable of providing

the services with equal strength to the farmers, which in turn compels the

farmers to depend on alternative agencies for different inputs. The built-in

constraints refrain cooperatives and government departments from extending

effective and timely services to the farmers. These findings emphasise the

need for revamping the input distribution system, which may be effected by

reducing the number of agencies supplying input or amalgamating the

different agencies since they all tend to focus on the same target group.

These findings are in line with the findings of Sulaiman et al. (2006).

5.3.3 Opinions of members regarding extending of services by milk producers

cooperative societies in the study area

In the study area majority (76.67 %) of the members expressed that

they were highly satisfied with the supply of inputs because the inputs

required by the members were supplied by the societies. Majority (50 % and

45 %) of the members opined that they were satisfied with the grading and

83

correct weighment. About the better prices majority of the respondents

expressed as not satisfied because the present prices given by the society is

found to be non-remunerative. Loan to purchase Milch animals were

completely deleted from the societies activities and therefore 65.00 per cent of

the respondents expressed as not satisfied. Half of the members were found

to have satisfactory relation with the MPCS because here the understanding

between the members and MPCS personnel is good. When it comes to the

market news, majority of the farmers (76.67 %) expressed as not satisfactory

and no single member expressed as highly satisfactory because all most all

the MPCS in the study area failed to convey the day to day on going market

news to the members. The similar cases were also existed in training to

members. Here also only 16.66 per cent of the respondents expressed as

highly satisfactory, 30.00 per cent said as satisfactory and remaining 53.34

per cent were said as not satisfactory because in the study area the societies

were not conducting adequate proper training programmes to the members.

Majority of the respondents were satisfied (45 %) in case of protecting

consumer interest. And most of the respondents in the study area expressed

their satisfaction (66.67 %) regarding regular payment, 20 per cent opined

highly satisfactory and 13.33 per cent members opined not satisfactory.

5.4 Pattern of marketing of milk and milk products

5.4.1 Pattern of sale of milk

The pattern of sale of fluid milk by the sample dairy farmers to the

different agencies is presented in the table 4.7. It can be observed from the

table that all the 120 sample farmers sold the milk to the dairy cooperative

society. The average quantity of milk sold differed according to the stage of

lactation period.

In the initial period of lactation they sold 5.14 litres in the morning and

5.07 litres in the evening. In the middle period of lactation they sold 5.00 litres

in the morning and 4.76 litres in the evening. Whereas in the end period of

lactation the quantity of milk sold decreased. They sold 4.65 litres in the

84

morning and 4.30 litres in the evening. Coming to the number of days for

which the milk was sold, it was 73 days in the initial period of lactation which

was decreased to 71 days in the middle period of lactation and to 68 days in

the end period of lactation.

Apart from selling to the society some farmers sold fluid milk to the

other agencies also. Some 26 dairy farmers sold milk to local consumers.

Here also the quantity of milk sold differed according to the stage of lactation.

In the initial period of lactation a farmer sold 8.12 litres per day. In the middle

period of lactation this quantity was decreased to 7.63 litres per day. They

sold to local consumers for 75 days in the initial period of lactation, for 72

days in the middle period and for 60 days in the end period. In the end period

of lactation they could sell only 6.14 litres per day.

Only six farmers sold part of their milk production to sweet shops and

hotels. In the initial period of lactation they sold 5.33 litres in the morning and

4.50 litres in the evening. In the middle period of lactation they sold 5.33 litres

in the morning and 4.16 litres in the evening. In the end period of lactation this

quantity was decreased to 4.16 litres in the morning and 2.66 litres in the

evening. In the initial period of lactation they sold milk to these shops for 76

days whereas in the middle and end period it decreased to 69 days and 60

days respectively.

Although the milk is marketed to the different agencies, major

proportion of milk is procured by the MPCS.

However, among small producers milk sold to household consumers is

higher due to the reason that many small farmers took hand loans from the

household consumers with an agreement to sell the milk to the household

consumers and secondly, due to the personal relationship existing between

the household consumer and the milk producer. However, by and large, the

sale to MPCS is higher. These findings are in line with the findings of Patil et

al. (1999)

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5.4.2 Pattern of sale of milk products

Results on sale of milk products by sample farmers are presented in

the Table 4.8. It is observed that some 21 milk producers apart from selling

milk they also sold milk products. About 2.02 litres of curd was sold to hotels

and sweet shops and 0.71 litres of curd was sold to household consumers by

a dairy farmer every day. Ten sample farmers sold butter also. These farmers

sold a total quantity 2.20 Kg butter to sweet shops and hotels and 1.80 Kg to

the household consumers.

It revealed that, all the members sold their milk products to the different

agencies other than MPCS. As the milk producers cooperative societies are

meant mainly for collection of milk only and as these societies are not

procuring milk products the members sold their milk products to other

agencies.

5.5 Cost and returns structure for milk production

5.5.1 Cost involved in milk production (per animal/annum)

The costs incurred on various inputs in milk production are presented

in table 4.9 and are discussed here. Dairy farmers incur cost on inputs such

as green fodder, dry fodder, concentrates, grains, veterinary medicines and

labour charges. The results with respect to cost of various items of dairy

farming are presented in Table 4.9.

The total variable cost incurred by dairy farmer per animal per year was

38421.77. The major items of variable costs incurred per animal were feed

which includes green fodder, dry fodder concentrate and grains. The cost

incurred on grains contributed the maximum i.e. 11968.00 followed by

concentrates cost ( 8232.00). It is because of high milk productivity, the

cross breed cow requires more concentrates as compared to other breeds.

The cost incurred on dry fodder was 3384.60, for the green fodder it was

3170.00.The main objective of dairy farming is to maximize the milk

production; this was fulfilled by feeding the animal with the green and dry

fodder, grains as well as concentrates. Thus the feed charges formed more

than half of the costs incurred in rearing.

86

The major fixed cost of dairy farm is depreciation on animals and

depreciation on building. In case of dairy farm the cost incurred on

depreciation of animals was 1666.66 and depreciation on building was

1850.00. Adding interest on these the total fixed cost was 3921.08 and the

total cost was 42342.85.The expenditure on various inputs showed that the

farmers have very little scope to reduce the variable costs by altering the

breed of animal or feeding charges or veterinary medicines.

5.5.2 Returns from milk production (per animal/annum)

The returns from dairy farming are received by selling of different dairy

outputs. The maximum returns are from the sale of milk, followed by sale of

young ones and sale of manure. The details of the returns from the dairy

farming by the sample farmers are presented in Table 4.10. It can be seen

from the table that the main share of returns is from the sale of milk.

The gross return obtained from per animal per year was 52875.00, in

which the sale of milk contributed the maximum share, the return from sale of

milk was 39125.00, followed by 10000.00 obtained from sale of young

ones and 3750.00 from sale of manure The B:C ratio obtained was 1.25 .

The net returns per animal per year was 10532.15. This trend of net

income with the dairy animal could be attributed mainly to the economies of

scale on the large farms. The production efficiency of dairy animals has

increased with selection of cross breed animal due to better milk production

as compared to other dairy animal breeds. On the basis of B.C ratio, dairy

farming has been found profitable. Thus, in nutshell, the dairy farming is a

profitable venture and has a bright future in the study area for improving

economic status of the farming community.

5.6. Resource use efficiency in milk production.

In order to maximize the profits from milk production, optimum use of

resources is imperative. This was examined based on the productivity of

resources used in the production activity. The technique of Cobb-Douglas

87

production function was used to measure the resource use efficiency and

allocative efficiency of resources in milk production in the study area (Table

4.11 and 4.12).

5.6.1 Cobb-Douglas Production Function estimates in milk production

The regression coefficients of various resources used in milk

production presented in the table 4.11 are discussed here. It is found that

regression coefficients of all resources were positive except grains (-0.113). In

this production function the regression coefficients of concentrates (0.610)

and green fodder (0.200) were found to be statistically significant at 5 per cent

level of significance and for other resources like grains and dry fodder they

were found to be non-significant. . A one per cent increase in cost of

concentrates would increase gross returns by 0.61 per cent and one per cent

increase in cost of green fodder would increase the gross returns by 0.20 per

cent. Thus increase in allocation of resources to the green fodder and

concentrates would increase the returns.

The coefficient of multiple determination (R²) was 0.802 indicating good

fit of the model. The returns to scale (0.818) were found to be decreasing.

5.6.2 Allocative efficiency of resources in milk production.

The resource use efficiency in milk production by the sample dairy

farmers was analysed by calculating the MVP:MFC ratios. These ratios are

presented in table 4.12. The MVP to MFC ratios indicated that the ratio was

greater than unity for concentrates and green fodder. This indicates that there

is ample scope for increasing the use of these resources to increase the gross

income of farmer. In other words effective management and timely use of

these resources can increase gross income. The ratio was less than unity

and negative in grain cost (-1.21) indicating that it has been over utilized and

farmers need to be advised to reduce the use of this resource in production.

And also in case of dry fodder the ratio was found to be less than unity (0.17)

hence, here also farmer need to be advised to reduce the use of this resource

in production of milk.

88

5.7. Problems faced by the members of milk producers co-operative societies

in production and marketing of milk in the study area

Opinions of farmers on the problems faced by them in producing milk and

marketing of milk were elicited right from the purchase of milch animals and

inputs in the production of milk. The Garette ranking technique was used to

rank these problems

5.7.1 Problems faced by the milk producers in production of milk.

The problems faced by the milk producers in milk production were

ranked using Garette ranking technique and are presented in Table 4.13.

The sample farmers expressed High cost of cattle feeds and lack of

good quality concentrates as the major problem in milk production. This might

be due to mixing of other low quality materials like wheat bran, paddy husk

etc., in manufactured compounded feeds. So the Department of Animal

husbandry need to keep a check on such malpractices followed in the feed

manufacturing. The animal husbandry department can undertake the work of

production of feeds in public sector and can be supplied to farmers on

subsidized rates.

Majority of the farmers (52.93 mean score) also expressed their

dissatisfaction over the Non-availability of emergency veterinary services and

artificial insemination facilities. This may be mainly because of limited

veterinary hospitals in the study area. Non availability of pasture land for

grazing was another major problem (mean score of 47.62). Majority farmers

belong to small and marginal land holding groups. So, they hardly leave lands

for grazing. The community grazing lands have been encroached to a great

extent.

High cost of cross-breed cattles is also one of the problem in milk

production. So, the animal husbandry department need to undertake the cattle

breeding work on larger scale to supply good milch breeds/crossbreeds to the

dairy farmers.

89

The problem of non-availability of improved breeds for milching was

ranked IV with a mean score of 48.14. Therefore it is suggested that the dairy

farmers should contact cattle breeding centres working under the department

of animal husbandry or any other private cattle breeding centres in the state

for good milch breeds.

Lack of technical know-how was one of the constraint in milk

production. This problem was ranked VI with a mean score of 42.49. The

animal husbandry department and agricultural universities in the state are

training the farmers on various aspects of scientific dairy management

practices. The dairy farmers should make best use of these services.

5.7.2 Problems faced by the dairy farmers in marketing of milk

The problems faced by the dairy farmers in marketing of milk were also

elicited from the sample dairy farmers and were subjected to analysis through

Garette ranking technique. The results are presented in Table 4.14 and are

discussed here.

Milk is the most perishable agricultural commodity and hence, the dairy

farmer should be very cautious in preparing for as well as in marketing of milk.

Farmers opined that the price fixed by milk producers cooperative

society was not remunerative. This problem was ranked I with a mean score

of 51.81. This may be because of increasing cost of inputs required for milk

production. Farmers also expressed their dissatisfaction over the grading of

milk. Improper grading was ranked II with a mean score of 51.68. This may be

mainly because we are not attaching much importance to the grading of

commodity. The price paid by the milk producers co-operative societies or

milk men is not remunerative to the milk producers. Under the present

increasing trend of fodder, feeds, labour and other related input costs in milk

production this is bound to happen.

90

Farmers opined that there was prevalence of malpractices in

measurement of milk. This problem was ranked III with a mean score of

51.16. Farmers experienced the difficulty in getting the payment for their

produce in time. This problem of delayed payment of sale proceeds of the

produce was ranked IV with a mean score of 47.13. The management of the

KMF need to take these things seriously and arrange for the payment to the

milk sellers timely.

91

6. SUMMARY AND POLICY IMPLICATIONS

Agriculture throughout the world is still man’s single most important

activity despite, all the advances of high technology; it is still the only reliable

source of food. Agriculture is the largest single employer in many third world

countries. India with 2.40 per cent of the global geographical area, 16 per cent

of the world human population and nearly 17 per cent of cattle population, still

more than 65 per cent of population is dependent on agriculture in one or the

other way. It is the main or only source of livelihood for over 50 per cent of

population, and contributes 13.90 per cent to the national income.

With the galloping growth in human population, the demand for crop

and livestock products is ever increasing. Currently, livestock is one of the

fastest growing agricultural sub-sectors in developing countries and this

sector provides regular employment to 11 million people in principal status

and 9 million people in subsidiary status. Its share to total GDP is around 3.90

per cent and is largest segment of the agricultural sector. This growth is

driven by rapidly increasing demand for livestock products, population growth,

urbanization and increasing incomes. The Net Domestic Product from

agriculture and allied activities is 1179341.00 crores out of which livestock

sector contributes 459051.00 crores of value of output (Basic Animal

Husbandry Statistics, (2013), Department of animal Husbandry, Dairying and

Fisheries, GOI). In livestock sector, dairy has emerged as an important sub

sector as it contributes 305484.00 crores of value of output to livestock

sector (2011-12).It is also considered as one of the potential sector for export

earnings. This suggests its potential to emerge as an engine of agricultural

growth in the coming decades.

As per the figure of 19th livestock census, October 15, 2012 India has

blessed with huge livestock population of 512.05 million numbers, (Female

cattle -122.90 million numbers and Female buffaloes- 108.70 million numbers)

and livestock population constitutes 37.28 per cent cattle, 21.23 per cent

buffaloes, 12.71 per cent sheep, 26.40 per cent goats, 2.01 per cent pigs and

others 0.37 per cent. Livestock population has increased substantially in

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Gujarat (15.36%), Uttar Pradesh (14.01%), Assam (10.77%), Punjab (9.57%),

Bihar (8.56%), Sikkim (7.96%), Meghalaya (7.41%), Chhattisgarh (4.34%) and

Karnataka (3.19%).

Dairy farming is one of the important activities of the rural population of

our country. The importance of the dairy, as a subsidiary industry to

agriculture, has been stressed by the National Commission on Agriculture.

Dairy enterprise, next to agriculture, not only provides continuous income but

also provides employment to a large number of the rural poor. Dairying can be

used as a tool for poverty alleviation in the country.

Milk being an important source of protein in India, particularly in rural

areas, the demand for milk is likely to increase with the increase in rural

prosperity. With the growing demand for various products, Dairy farming can

provide good opportunity, particularly for the small and marginal farmers and

the landless to improve their economy. Livestock development is a labour

intensive activity which demands very close attention throughout the year.

This will be a boon for the small farmers and landless who are mostly

unemployed or under-employed. Thus, animal husbandry can be promoted as

a major economic activity in non-irrigated regions in the country.

The present study was undertaken with the following specific

objectives,

1. To study the pattern of inputs procurement by the dairy farmers from

milk producers co-operative societies.

2. To analyze the pattern of milk marketing by the members to the milk

producers co-operative societies.

3. To estimate the costs and returns in milk production.

4. To document the problems faced by the members of milk producers

co-operative societies in production and marketing of milk.

5.

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6.1 Methodology

The present study was taken up in Dharwad, Hubballi, Kalagatagi,

Kundagol and Navalagund taluks of Dharwad district. The primary data

pertaining to procurement of required inputs, veterinary services, marketing of

milk, cost and returns in milk production and the problems faced by the dairy

farmers were collected from the 120 sample dairy farmers by personal

interview method using pre-tested schedule. Two villages from each selected

taluk, where the Dairy farming is widely practiced were selected randomly for

the study. From each selected village, 12 dairy farmers were selected

randomly.

For identifying the pattern of inputs procurement by the dairy farmers

from milk producers co-operative societies and milk marketing by the

members to MPCS tabular analysis was employed. Budgeting technique was

used to estimate the costs and returns in milk production. And Garett ranking

technique was used to document the problems faced by the members of milk

producers co-operative societies in production and marketing of milk.

6.2 Findings of the study

The major findings of the study are summarised below

Composition of dairy animals

The composition of the dairy animals of sample farmers indicated that

they possessed dairy animals as well as draught animals. Among these,

dairy animals were reared by all the sample dairy farmers. Hence, dairy

farming forms a major component. The number of cows possessed by them

were more than number of buffalos i.e. 226 and 77 respectively.

Pattern of inputs procurement

The input supply services like feed, fodder, veterinary services, loan

facilities and milk cans were analysed in terms average quantity of

procurement and frequency of procurement. The average quantity of feed

purchased by a member from the society was 485 Kg per annum. As many

94

110 out of 120 sample farmers purchased feeds from the society. Whereas

only 14 members purchased fodder from the society and the average quantity

of fodder purchased by a member was four quintals per annum. The society

could extend veterinary services to the needy 25 members. The loan facilities

of the MPCS were availed by 24 members. The average amount borrowed by

a member was 18125 per annum. The society also helped the members by

supplying milk cans.

The number of dairy farmers opting to purchase inputs from other

agencies other than MPCS was less. And even the quantities purchased were

also less. Of the 120 sample farmers only 24 farmers purchased feed from the

other agencies. The average quantity of feed purchased by a farmer was 202

Kgs per annum. The fodder was purchased from other agencies by only 12

farmers and the average quantity purchased was 4.30 quintals per annum.

From the society 86 farmers had purchased the milk cans and the remaining

40 farmers purchased the milk cans from other agencies. Each of the member

could purchase one milk can. Veterinary services and loan facilities were not

extended to the farmers by these agencies.

As per the opinion of members of societies, it was observed that the

performance of the society was better. The members in the study area were

highly satisfied regarding the supply of inputs (76.67 %). Training to members

and accessibility to market news to the members were poor in the whole study

area.

Pattern of marketing of milk and milk products

The pattern of sale of fluid milk by the sample dairy farmers to the

different agencies showed that all the 120 sample farmers sold the milk to the

dairy cooperative society. Apart from selling to MPCS, 26 sample farmers sold

milk to the local consumers and six members to the sweet shops and hotels.

The average quantity of milk sold differed according to the stage of lactation

period.

95

It is observed that some 21 milk producers sold milk products. About

2.02 litres of curd was sold to hotels and sweet shops and 0.71 litres of curd

was sold to household consumers by a farmer per day. Ten milk producers

sold 2.20 kg butter to hotels and sweet shops and 1.80 kg to the household

consumers per day.

Costs and Returns in milk production.

The major items of variable costs incurred were feed which includes

green fodder, dry fodder concentrates and grains. The cost incurred on grains

contributed maximum i.e. 11968.00 followed by concentrate cost 8232.00.

The cost incurred on dry fodder was 3384.60, and the green fodder cost

was 3170.00. The major items of fixed cost of dairy farm is depreciation on

animals and depreciation on building. In case of sample dairy farm the cost

incurred on depreciation of animals was 1666.66 and depreciation on

building was 1850.00. The total cost was 42342.85.

The gross return obtained per animal per year was 52875.00 in

which the sale of milk contributed the maximum share, the return from sale of

milk was 39125.00, followed by 10000.00 obtained from sale of young

ones and 3750.00 from sale of manure The B:C ratio obtained was 1.25.

The net returns per animal per year were 10532.15.

Resource use efficiency in milk production

The regression coefficients of all the resources used in milk production

were positive except grains (-0.113). In this production function the regression

coefficients of concentrates and green fodder were found to be statistically

significant at 5 per cent level of significance and for other resources like

grains and dry fodder they were found to be non-significant. The coefficient of

multiple determination (R²) was 0.802 indicating good fit of the model. The

returns to scale (0.818) were found to be decreasing.

96

The MVP to MFC ratio indicated that the ratio was greater than unity

for concentrates and green fodder. This indicates that there is ample scope

for increasing the use of these resources service to increase the gross income

of farmer. Ratio was less than unity and negative in grain cost (-1.21)

indicated that it has been over utilized and farmers are advised to reduce this

resource in production. And also in case of dry fodder the ratio was found to

be less than unity (0.17) and hence, farmers are advised to reduce the use of

this resource in production of milk.

Problems in production and marketing of milk

High cost of cattle feeds and lack of good quality concentrates, Non-

availability of emergency veterinary services and artificial insemination

facilities, High cost of cross-breed cattles, Non-availability of improved breeds

for milching, Lack of grazing land and Lack of technical know-how were the

major problems faced by the dairy farmers in milk production. Low price,

Delayed payment, Improper grading and Malpractices in measurement of milk

were the major problems faced by the dairy farmers in marketing of milk.

6.3 Policy implications

1. Dairying is a capital intensive enterprise, small and marginal farmers

and landless labourers constitute the major portion of the rural

population depending on dairying. These people cannot afford to invest

their own resources in dairying. Hence, the commercial banks and

cooperative societies have to take up advancing of credit to the dairy

farmers at a reasonable rate of interest and present scale of finance of

dairying enterprise should be enhanced.

2. Priority must be given to ensure availability of high graded milch breeds

in adequate numbers. The cross breeding of milch cows in different

farms under department of animal husbandry should be geared up.

97

3. As expressed by the sample dairy farmers the price for their milk is not

remunerative. So the government should consider to bring the milk

under price support policy. By reviewing the cost structure of milk the

agricultural cost and price commission should facilitate the government

to evolve appropriate price policy for milk at least for the milk

producer’s co-operative societies.

4. The net returns in milk production can be increased by reducing the

cost of inputs. For this purpose co-operative efforts are required to

produce the green fodder and concentrates.

5. The dairy farmers faced the problem of high cost of cattle feeds. The

primary milk producers cooperative societies must collect the

requirement of cattle feed by the farmers in their respective areas of

operation and arrange to supply the balanced cattle feed to the farmers

in time at reasonable price. Adequate arrangements have to be made

to supply quality seeds of fodder crops for improved fodder cultivation.

6. Extension activities related to dairy farming need to be intensified to

overcome the problem of lack of technical know how of the dairy

enterprise to the farmers.

98

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107

APPENDIX I

SCHEDULE

Topic: “Milk Producers Co-operative Societies in Betterment of Dairy Farmers’

Economy- An analysis.

Date of Investigation: ___/___/2014

Village : __________________ Taluk:

___________________

1) General Information:

i. Name of the farmer : ____________________________________

ii. Age (years) : __________________

iii. Education: Illiterate(0)□/Primary(4)□/Sec.(7)□/SSLC (10)□/PUC□/Diploma

UG□/PG □/PG Diploma□

iv. Type of family : Joint□/Nuclear□,

v. Primary occupation : __________________

vi. Secondary occupation :__________________

vii. Experience in dairy farming (years) : ___________

2) Family Size (No’s) : Male: ____, Female: ____,

Children: ____

.Land holdings (acre)

Sl.No. Types of

Land Owned

Leased In Leased Out

Total

Value

of Land

(Rs./ac) Area

Value

(Rs/ac) Area

Value

(Rs/ac)

1. Dry

2. Irrigated

3. Source of

irrigation*

*Source of irrigation: (1) Open Well (2) Tube well (3) Canal (4) Tank

108

Asset position of the Dairy farmers’:

Sl. No. Particulars Purchase price 1 Farm Implements

a Iron plough b Wooden plough

c Spade d Harrows

e Sickle f Axe

2 Farm Machinery a Tractor b Bullock Cart c Sprayer

d Irrigation pump sets e Chaff cutter

3 Farm building

Dairy Composition and Milk Production

Sl. No.

Animal Type

No. Year of

Purchase

Value of animal at the time

of purchase

Milk production (lit / day )

Milk sales ( lit/ day)

Milk prices (Rs/ lit)

Total value

Dung prodn.

Value of dung (Rs/CL)

1 Cows A Males

I Local II Crossbred

B Females I Local II Crossbred

2 Buffaloes A Males

B Females

Dairy Herd Size:

Pattern of investment in Dairy farming (Per herd)

Sl. No. Items of Investment Value

1 Sheds including land

2 Well/Bore Well

3 Electricity facility

4 Milking Equipment

5 Miscellaneous items

109

Feed, Fodder and Miscellaneous Expenditure (Per Herd perYear)

Sl. No.

Particulars Unit Total Quantity

Price/Unit (Rs)

Total Cost (Rs)

1 Feed and Fodder cost A Dry fodder B Green fodder C Concentrates

D Grains 2 Electricity charges 3 Insemination

4 Medicine

5 Veterinary service & Supervision

6 Building repairs 7 Machinery repair 8 Water 9 Others (Specify)

Opinion of farmers

Sl. No.

Services Highly

Satisfactory Satisfactory

Not Satisfactory

1 Supply of inputs

2 Correct weighment

3 Better prices

4 Grading (fat % )

5 Loan to purchase milch animals

6 Regular payments

7 Relationship with MPCS

8 Training to members

9 Protecting producers interest

10 Market news

Returns from Dairy Farming (per herd per year)

Sl.

No.

Particulars Units Total

Quantity

Price/unit

(Rs)

Total Value

(Rs)

1 Milk production Lts

2 Dung production CL

3 Sale of Males No.

4 Sale of Calves No.

5 Sale of dry/culled

animals

No.

110

Milk use pattern :

1. Qty produced / day :___________

2. Qty consumed (i) as milk :__________

(ii) as converted curd : _______

(iii) as butter mlik : _______

(iv) as butter or ghee : ___________

3. Qty of milk available for sale : ___________

Pattern of inputs procurement by the dairy farmers’ from Milk Producers Co-

operative societies.

Sl.No. Services Quantity of procurement

Frequency of procurement

Price Qty Sufficient are not

1 Feed 2 Fodder

3 Veterinary Services

4 Technical Services 5 Working Capital 6 Loan to purchase

Milch animals

7 Weighing Machine 8 Grading (fat %)

Machine

9 Milking Machine 10 Fodder Cutting

Machine

11 Training to Members

12 Market News

13 Milk Cans

Pattern of inputs procurement by the dairy farmers’ from other agencies.

Sl.No. Services Quantity of procurement

Frequency of procurement

Price Qty Sufficient are not

1 Feed 2 Fodder 3 Veterinary

Services

4 Technical Services 5 Working Capital

6 Loan to purchase Milch animals

7 Weighing Machine

111

Sl.No. Services Quantity of procurement

Frequency of procurement

Price Qty Sufficient are not

8 Grading (fat %) Machine

9 Milking Machine

10 Fodder Cutting Machine

11 Training to Members

12 Market News

13 Milk Cans

The pattern of milk marketing by the members to the Milk Producers Co-

operative Societies (Liters /day)

Sl. No.

Milk marketed Qty. Marketed/day Price No. of days marketed

Morning

Evening

Total

1 Initial period of lactation

2 Middle period of lactation

3 End period of lactation

The Pattern of milk marketing to other agencies

Sl. No.

Agency to whom sold

Qty. Marketed/day Price No. of days marketed

Morning Evening

Total

1 2 3

Pattern of sale of milk products

Sl. No.

Product Agency to whom sold Qty sold Price

1 2 3

112

Problems faced by the members of milk producers co-operative societies in

production and marketing of milk.

Sl.No. Problems Severe Moderate Not

severe

A Infrastructural Constraints

1 Lack of Improved equipment

2 Irregular & inadequate supply of

cattle feed

3 Unavailability of emergency

veterinary services

4 Lack of training facilities

5 Unavailability of green fodder

throughout the year

6 Others (if any)

B Economic Constraints

1 High cost of fodder seed

2 High cost of cross-bred cow

3 High cost of cattle feed

4 Others (if any)

C Marketing Constraints

1 Low Procurement Price

2 Delay in Getting Sale Proceeds

3 Lack of Timely Collection of Milk

4 To Many Formalities

5 Lack of market for value added

products

6 Others (if any)

113

APPENDIX II

Livestock and poultry population (District wise)

Sl No Districts Livestock

Cattle Buffaloes Sheep Goat Rabbit Pig Dog Others Total(2-9)

1 2 3 4 5 6 7 8 9 10

2007 10507325

4329076 9565696 615713

4 9841

279763

1996872

37544 32883251

1 Bagalkot 305150 253536 673162 430105 243 23848 60190 1436 1747670

2 Bangluru 127439 11254 80108 41097 1276 4522

124163

1140 390999

3 Bangluru (R) 1647718 28672 141695 94575 400 2027 40485 53 472625

4 Belgavi 598467 859421 899707

6099022

1954 24819 12715

2 6307 3127729

5 Bellari 391299 207595 655832 272467 161 14234 44436 682 1586706

6 Bidar 277328 176759 84642 189001 48 18613 27203 3309 776903

7 Vijaypur 279785 191538 336015 452329 38 27146 73690 762 1361303

8 Chamarajnagar 273798 28469 133197 114861 156 1005 18427 480 570393

9 Chikkballapur 236510 48439 420267 166265 585 7344 60845 164 940419

10 Chikkmagalur 386138 98279 96278 74679 280 2460 73556 188 731858

11 Chitradurga 341011 193260 931885 368730 37 4663 64701 8238 1912525

12 D. Kannada 396609 15119 307 25749 1000 5332

221401

3 665520

13 Davanagere 395123 223601 333461 153940 170 6493 48679 109 1161576

14 Dharwad 219686 99878 57105 72373 266 2627 40696 261 492892

15 Gadag 158629 80186 313380 172543 86 4037 32957 475 762563

16 Gulbarga 516753 118740 101973 411412 56 25256 57139 927 1232256

17 Hassan 633163 191380 201133 132165 38 2489 67373 643 1228384

18 Haveri 311822 119864 265527 150542 301 5869 48547 833 903305

19 Kodagu 119422 26801 705 7196 526 26148 66013 25 246836

20 Kolar 240469 49771 366488 88167 305 2982 50989 177 799348

21 Koppal 245046 108918 474231 199461 159 13323 36168 317 1077623

22 Mandya 349977 168925 382561 244323 194 6878 37338 57 1190253

23 Mysuru 616796 66265 257019 197020 157 2921 49704 296 1190176

24 Ramanagar 266192 4034 222037 167647 170 2871 24274 251 723746

25 Raichur 411445 213058 560996 382253 94 16295 54487 256 1638884

26 Shivamogga 579254 191147 25191 61680 316 4070

102310

221 964189

27 Tumkuru 589226 241109 1067709 517763 121 7718 90119 9164 2523727

28 Udupi 3183509 26696 59 2730 123 1311

121346

2 471076

29 Uttar Kannada 366949 118669 2702 11994 277 900 93403 35 594929

30 Yadgiri 690614 130625 480324 344165 4 11292 39081 733 1396838

MILK PRODUCERS CO-OPERATIVE SOCIETIES IN BETTERMENT OF DAIRY FARMERS ECONOMY - AN

ANALYSIS PRIYADARSHINI C. GADAD 2015 Dr. L. B. KUNNAL

CHAIRMAN

ABSTRACT Milk co-operatives are an integral part of the milk marketing and dairy development

programme in India. The study was undertaken with specific objectives of pattern of

inputs procurement by the dairy farmers from MPCS, the pattern of milk procurement by

MPCS, cost and return structure in milk production and problems faced by the dairy

farmers. The primary data pertaining to specific objectives were collected from the sample

dairy farmers by personal interview method using pre-tested schedule. Multistage

sampling technique was adopted for selection of farmers for the study. Analytical

techniques employed were tabular analysis, budgeting technique and Garrett’s ranking

technique.

The input supply services like feed, fodder, veterinary services, loan facilities and

milk cans were analysed in terms of average quantity of procurement and frequency of

procurement. It showed that in case of feed out of 120 sample dairy farmers surveyed

110 (91.67 %) farmers procured the feed from the society. The number of dairy farmers

opting to purchase inputs from other agencies other than MPCS was less. And even the

quantities purchased were also less.

The pattern of sale of milk by the sample dairy farmers to the different agencies

showed that the average quantity of milk sold differed according to the stage of lactation

period.

The total cost incurred in milk production was 42342.85 per annum and the gross

returns from milk production were 52875 per animal per annum. The net returns in milk

production per animal/annum were found to be 10532.15 leading to benefit cost ratios of

1.25.

High cost of cattle feeds and lack of good quality concentrates, non-availability of

emergency veterinary services and artificial insemination facilities, high cost of cross-

breed cattles, low prices and delayed payment, were the major problems faced by the

dairy farmers in production and marketing of milk.